The Thode Company established a wholly-owned subsidiary in Saudi Arabia on January 1, 2016, when the exchange rate was $0.30/riyal (SAR). Of Thode's initial SAR300,000,000 investment, SAR150,000,000 was used to acquire plant assets (ten-year life) and SAR75,000,000 was used to acquire inventory. The remaining amount was initially held as cash by the subsidiary.

During 2016, the subsidiary reported net income of SAR30,000,000. Inventory purchases of SAR22,500,000 were made evenly during the year. It paid dividends of SAR15,000,000 on September 30, when the exchange rate was $0.255/SAR. No other transactions occurred between the subsidiary and the parent. The subsidiary's condensed income statement appears below:

SalesSAR127,500,000Cost of goods sold(60,000,000)*Depreciation expense(15,000,000)**Other cash expenses(22,500,000)Net incomeSAR30,000,000

*Assume a FIFO inventory flow assumption.

**Relates solely to plant assets acquired on January 1, 2016.

The average rate during the year was $0.265/SAR. On the balance sheet date, it was $0.25/SAR.

(a)Assuming the functional currency is the riyal, translate the subsidiary's preclosing trial balance at December 31, 2016, and schedule calculating the subsidiary's translation gain or loss for 2016.

(b)Assuming the functional currency is the U.S. dollar, remeasure the subsidiary's preclosing trial balance at December 31, 2016, and schedule calculating the subsidiary's remeasurement gain or loss for 2016.