Translation and Remeasurement Gain and Loss

Costco Canada Holdings is a Canadian subsidiary of Costco Wholesale Corporation, a U.S. company. Assume that the following data relate to Costco Canadas activities for 2020 (in millions).

Net monetary assets (liabilities), January 1, 2020	C$ 700
Acquisition of plant assets for debt, February 15, 2020	1,000
Purchase of inventory made evenly during 2020	3,500
Collection of receivables outstanding at January 1, 2020	2,700
Sales made evenly during 2020	6,000
Cost of goods sold	3,300
Depreciation of assets acquired when the exchange rate was $0.85/C$	400
Current operating expenses (excluding depreciation and amortization), incurred evenly during 2020	1,200
Refinancing or "rollover" of commercial paper	800

Exchange rates ($/C$) during 2020 are:

January 1, 2020	$0.80		Average for 2020	$0.75
February 15, 2020	0.78		December 31, 2020	0.72

(a) Assuming Costco Canadas functional currency is the U.S. dollar, prepare a schedule to compute the remeasurement gain or loss for 2020.

Instructions:

Use negative signs with answers to indicate a negative exposed position balance.

Use negative signs with answers to indicate an amount that reduces the exposed position balance.

Using the drop-down menu, select the appropriate answer to indicate a remeasurement gain or remeasurement loss.

Do not use a negative sign with your remeasurement gain or remeasurement loss answer.

(in millions)	Amount (C$)	$/C$	Amount ($)
Exposed position, 1/1/20	C$Answer	Answer	$Answer
Acquisition of plant assets for debt	Answer	Answer	Answer
Purchase of inventory	Answer	Answer	Answer
Sales	Answer	Answer	Answer
Operating expenses	Answer	Answer	Answer
			Answer
Exposed position, 12/31/20	C$Answer	Answer	Answer
AnswerRemeasurement gainRemeasurement loss			$Answer

(b) Assuming Costco Canadas functional currency is the Canadian dollar, prepare a schedule to compute the translation gain or loss for 2020. Assume net assets on January 1, 2020, amounted to C$1,200 million.

Instructions:

Use negative signs with answers to indicate a negative exposed position balance.

Use negative signs with answers to indicate an amount that reduces the exposed position balance.

Using the drop-down menu, select the appropriate answer to indicate a translation gain or translation loss.

Do not use a negative sign with your translation gain or translation loss answer.

(in millions)	Amount (C$)	$/C$	Amount ($)
Exposed position, 1/1/20	C$Answer	Answer	$Answer
Net income in 2020	Answer	Answer	Answer
			Answer
Exposed position, 12/31/20	C$Answer	Answer	Answer
AnswerTranslation gainTranslation loss			$Answer