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Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary

Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):

Cash

NGN

16,580

Notes payable

NGN

20,260

Inventory

11,300

Common stock

21,600

Land

4,130

Retained earnings

10,800

Building

41,300

Accumulated depreciation

(20,650

)

NGN

52,660

NGN

52,660

The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place:

2020

Feb.

1

Paid 8,130,000 NGN on the note payable.

May

1

Sold entire inventory for 17,300,000 NGN on account.

June

1

Sold land for 6,130,000 NGN cash.

Aug.

1

Collected all accounts receivable.

Sept.

1

Signed long-term note to receive 8,130,000 NGN cash.

Oct.

1

Bought inventory for 20,130,000 NGN cash.

Nov.

1

Bought land for 3,130,000 NGN on account.

Dec.

1

Declared and paid 3,130,000 NGN cash dividend to parent.

Dec.

31

Recorded depreciation for the entire year of 2,065,000 NGN.

The U.S dollar ($) exchange rates for 1 NGN are as follows:

2011

NGN 1

=

$

0.0061

2013

1

=

0.0055

August 1, 2019

1

=

0.0075

December 31, 2019

1

=

0.0077

February 1, 2020

1

=

0.0079

May 1, 2020

1

=

0.0081

June 1, 2020

1

=

0.0083

August 1, 2020

1

=

0.0087

September 1, 2020

1

=

0.0089

October 1, 2020

1

=

0.0091

November 1, 2020

1

=

0.0093

December 1, 2020

1

=

0.0095

December 31, 2020

1

=

0.0110

Average for 2020

1

=

0.0100

  1. Assuming the NGN is the subsidiary's functional currency, what is the translation gain or loss for 2020?

  1. Assuming the U.S.$ is the subsidiary's functional currency, what is the translation gain or loss for 2020?

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