Translated and Remeasured Trial Balances

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 Thodes 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:

Sales	SAR127,500,000
Cost of goods sold	(60,000,000)*
Depreciation expense	(15,000,000)**
Other cash expenses	(22,500,000)
Net income	SAR30,000,000

*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 subsidiarys preclosing trial balance at December 31, 2016, and prepare a schedule calculating the subsidiarys translation gain or loss for 2016.

• Use negative signs with your Cr (credit balance) answers, in the P Dr(Cr) and $ Dr(Cr) columns only.
• Enter answers using all zeros (do not abbreviate answers to millions or thousands).

Instructions for Translation Gain/Loss Schedule:

1. Use negative signs with answers to indicate a negative exposed position balance.
2. Use negative signs with answers to indicate an amount that reduces the exposed position balance.
3. Using the drop-down menu, select the appropriate answer to indicate a translation gain or translation loss.
4. Do not use a negative sign with your translation gain or translation loss answer.
5. Enter answers using all zeros (do not abbreviate to millions or thousands)

*Drop down entry title is either translation gain or translation loss.

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

• Use negative signs with your Cr (credit balance) answers, in the P Dr(Cr) and $ Dr(Cr) columns only.
• Enter answers using all zeros (do not abbreviate answers to millions or thousands).

Instructions for Remeasurement Gain/Loss Schedule:

1. Use negative signs with answers to indicate a negative exposed position balance.
2. Use negative signs with answers to indicate an amount that reduces the exposed position balance.
3. Using the drop-down menu, select the appropriate answer to indicate a remeasurement gain or remeasurement loss.
4. Do not use a negative sign with your remeasurement gain or remeasurement loss answer.
5. Enter answers using all zeros (do not abbreviate to millions or thousands).

*Drop down entry title is either remeasurement gain or remeasurement loss.

Please show all work. Thank you!!!!!

December 31, 2016 Translated Trial Balance Cash SAR Dr (Cr) $/SAR Dr (Cr) SAR Inventory Plant assets Capital Dividends Sales Cost of goods sold Depreciation expense Other expenses Other comprehensive loss (translation gain or loss) Net income SAR below Translation Gain/Loss Schedule SAR $/SAR Exposed position, beginning SAR Net Income Dividends Exposed position, ending SAR SAR Dr (Cr) $/SAR Dr (Cr) SAR December 31, 2016 Remeasured Trial Balance Cash Inventory Plant assets Capital Dividends Sales Cost of goods sold Depreciation expense Other expenses Remeasurement gain or loss below SAR Remeasurement Gain/Loss Schedule SAR $/SAR Exposed position, beginning SAR Sales Purchases Cash expenses Dividends Exposed position, ending SAR December 31, 2016 Translated Trial Balance Cash SAR Dr (Cr) $/SAR Dr (Cr) SAR Inventory Plant assets Capital Dividends Sales Cost of goods sold Depreciation expense Other expenses Other comprehensive loss (translation gain or loss) Net income SAR below Translation Gain/Loss Schedule SAR $/SAR Exposed position, beginning SAR Net Income Dividends Exposed position, ending SAR SAR Dr (Cr) $/SAR Dr (Cr) SAR December 31, 2016 Remeasured Trial Balance Cash Inventory Plant assets Capital Dividends Sales Cost of goods sold Depreciation expense Other expenses Remeasurement gain or loss below SAR Remeasurement Gain/Loss Schedule SAR $/SAR Exposed position, beginning SAR Sales Purchases Cash expenses Dividends Exposed position, ending SAR