Remeasurement of financial statements Assume that your company owns a subsidiary operating in Great Britain. The subsidiary has adopted the British pound () as its functional currency. Your parent company operates this subsidiary like a division or a branch office, making all of its operating decisions, including pricing of its products. You conclude, therefore, that the functional currency of this subsidiary is the $US and that its financial statements must be remeasured using the temporal method prior to consolidation. The subsidiary's financial statements (in ) for the most recent year follow in part a. below:

The relevant exchange rates for the $US value of the British pound () are as follows:

BOY rate	$1.90
EOY rate	$2.00
Avg. rate	$1.95
Dividend rate	$1.99
Historical rates:
Beginning inventory	$1.90
Land	$1.50
Building	$1.60
Equipment	$0.64
Historical rate (common stock and APIC)	$1.20

For parts a. and b. below, use a negative sign with answers to indicate a reduction.

a. Remeasure the subsidiary's income statement, statement of retained earnings, and balance sheet into $US using the temporal method for the current year (assume that the BOY Retained Earnings is $785,141).

Round all answers in the "In US Dollars" column to the nearest dollar.

b. A Compute the remeasurement gain or loss directly assuming BOY net monetary assets of (179,760), a net monetary liability.

Round all answers to the nearest dollar.

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