The following account balances are for the Agee Company as of January 1, 2020, and December 31, 2020 All amounts are denominated in kroner (Kr) January 1, 2020 December 31, 2020 Accounts payable (24,000 ) (31,500 ) Accounts receivable 45,000 95,000 Accumulated depreciationbuildings (36,000 ) (41,000 ) Accumulated depreciationequipment 0 (6,600 ) Bonds payabledue 2023 (55,000 ) (55,000 ) Buildings 125,000 100,500 Cash 51,000 9,600 Common stock (60,000 ) (71,000 ) Depreciation expense 0 31,000 Dividends (10 1 20) 0 48,000 Equipment 0 46,000 Gain on sale of building 0 (7,600 ) Rent expense 0 18,100 Retained earnings (46,000 ) (46,000 ) Salary expense 0 36,000 Sales 0 (133,000 ) Utilities expense 0 7,500 Additional Information Agee issued additional shares of common stock during the year on April 1, 2020 Common stock at January 1, 2020, was sold at the start of operations in 2013 Agee purchased buildings in 2014 and sold one building with a book value of Kr 5,100 on July 1 of the current year Equipment was acquired on April 1, 2020 Relevant exchange rates for 1 Kr were as follows 2013 $ 2 45 2014 2 25 January 1, 2020 2 55 April 1, 2020 2 65 July 1, 2020 2 85 October 1, 2020 2 95 December 31, 2020 3 05 Average for 2020 2 75 Assuming the U S dollar is the functional currency, what is the remeasurement gain or loss for 2020 The December 31, 2019, U S dollar translated balance sheet reported retained earnings of $96,600, which included a remeasurement loss of $13,000 Assuming the foreign currency is the functional currency, what is the translation adjustment for 2020 The December 31, 2019, U S dollar translated balance sheet reported retained earnings of $112,500 and a cumulative translation adjustment of $10,800 (credit balance)

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Posted on Jul 17, 2024

	January 1, 2020			December 31, 2020
Accounts payable		(24,000	)		(31,500	)
Accounts receivable		45,000			95,000
Accumulated depreciationbuildings		(36,000	)		(41,000	)
Accumulated depreciationequipment		0			(6,600	)
Bonds payabledue 2023		(55,000	)		(55,000	)
Buildings		125,000			100,500
Cash		51,000			9,600
Common stock		(60,000	)		(71,000	)
Depreciation expense		0			31,000
Dividends (10/1/20)		0			48,000
Equipment		0			46,000
Gain on sale of building		0			(7,600	)
Rent expense		0			18,100
Retained earnings		(46,000	)		(46,000	)
Salary expense		0			36,000
Sales		0			(133,000	)
Utilities expense		0			7,500

Additional Information

Agee issued additional shares of common stock during the year on April 1, 2020. Common stock at January 1, 2020, was sold at the start of operations in 2013.
Agee purchased buildings in 2014 and sold one building with a book value of Kr 5,100 on July 1 of the current year.
Equipment was acquired on April 1, 2020.

Relevant exchange rates for 1 Kr were as follows:

Assuming the U.S. dollar is the functional currency, what is the remeasurement gain or loss for 2020? The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $96,600, which included a remeasurement loss of $13,000.
Assuming the foreign currency is the functional currency, what is the translation adjustment for 2020? The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $112,500 and a cumulative translation adjustment of $10,800 (credit balance).