Translation and Remeasurement of Subsidiary Trial Balance Costsave Corporation, a U.S. company, acquired Denner, a discount supermarket chain in Switzerland, on January 1, 2017. Denner is a subsidiary of Costsave, and its results are consolidated with those of Costsave in Costsave's financial statements. Denner's trial balances for January 1 and December 31, 2017, in Swiss francs (CHF) appear below. Dr(Cr) (in thousands) December 31 January 1 Cash and receivables CHF 45,000 CHF30,000 Inventories 55,000 65,000 Plants and equipment, net 180,000 160,000 Accounts and notes payable (120,000) (125,000) Common stock (40,000) (40,000) Retained earnings, January 1 (90,000) (90,000) ( Dividends 20,000 Sales (500,000) Cost of sales 375,000 Operating expenses 75,000 Totals CHFO CHFO Additional Information: (in thousands) 1. Included in operating expenses is depreciation expense of CHF5,000. 2. Plant and equipment of CHF25,000 was purchased for cash during 2017, when the exchange rate was $1.04. Depreciation of CHF2,000 was taken on this purchase during 2017, 3. The ending inventory was purchased during the month of December. 4. Revenues, purchases, and operating expenses other than depreciation occurred evenly during the year. 5. Dividends were declared on December 31, 2017. 6. Exchange rates for 2017 were as follows ($/CHF): January 1, 2017 Average for 2017 Average for December, 2017 December 31, 2017 $1.03 1.06 1.08 1.09 It is now December 31, 2017, and Denner's accounts must be converted to U.S. dollars in preparation for consolidation. (a) Denner's functional currency is the U.S. dollar. Prepare Denner's remeasured December 31, 2017 trial balance, and a schedule showing the computation of the remeasurement gain or loss for 2017 Use negative signs with your Cr (credit balance) answers. Enter answers in thousands. Remeasured Trial Balance, December 31 2017 CHF Dr(Cr) $/CHF Dr(Cr) Cash, receivables CHF45,000 1.09 $ 49,050 Inventories 55,000 1.08 59,400 Plant and equipment, net 180,000 (1) below 185,630 Accounts and notes payable (120,000) 1.09 $ $ (130,800) Common stock (40,000) 1.03 (41,200) Retained earnings, beginning (90,000) 1.03 (92,700) Dividends 20,000 1.09 21,800 Sales (500,000) 1.06 (530,000) Cost of sales 375,000 (2) below 2 375,000 x Operating expenses 75,000 (3) below 79,370 Remeasurement (gain) or loss (4) below 5,700 X CHFO $ $ 0 $/CHF $ Do not use negative signs with any of your answers below. (1) Plant and equipment, net (in thousands) CHF Plant and equipment, net: purchased prior to 2017 CHE 137,000 x x Plant and equipment, net: purchased during 2017 23,000 CHE 157,000 x 1.03 $ 1.04 141,110 X 29,120 x 185,630 Do not use negative signs with any of your answers below. (2) Cost of Sales in thousands) CHE $/CHF $ Beginning inventory CHE 60,000 X 1.03 $ 61,800 x Purchases 370,000 x 1.06 392,200 x Ending inventory 55,000 1.08 59,400 Cost of sales CHE 375,000 $ 394,600 x $ Do not use negative signs with any of your answers below. (3) Operating expenses (in thousands) CHE Depreciation (for P&E purchased prior to 2017) CHE 1 x Depreciation (for P&E purchased in 2017) 1 x Other operating expenses Total 1 x $/CHF 1 x $ 1 x 1 x 1 x 1 x 1 x CHF 1 x 1 X 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. (4) Remeasurement Gain/Loss Schedule (in thousands) CHE $/CHF Exposed position, beginning CHE 100,000 x 1.03 Sales 500,000 1.06 Purchases 370,000 x 1.06 Cash operating expenses (70,000) 1.06 Dividends (20,000) 1.09 Plant and equipment acquisition 30,000 x 1.04 103,000 X 530,000 392,200 x (74,200) (21,800) 31,200 x 92,400 x 98,100 x (5,700) X CHE 90,000 x 1.09 Exposed position, ending Remeasurement loss $ (b) Denner's functional currency is the Swiss franc. Prepare Denner's translated December 31, 2017 trial balance, and a schedule showing the computation of the translation gain or loss for 2017. Use negative signs with your Cr (credit balance) answers. Enter answers in thousands. Dr(Cr) 10 x 10 * 10 x 10 X Translated Trial Balance December 31 2017 CHF Dr(Cr) ) $/CHF Cash, receivables CHF45,000 10 x $ Inventories 55,000 1 1 x Plant and equipment, net 180,000 10 X Accounts and notes payable (120,000) 10 X Common stock (40,000) 10 X Retained earnings, beginning (90,000) 10 X Dividends 20,000 1 X Sales (500,000) 1 x Cost of sales 375,000 1 x Operating expenses 75,000 1 x Translation loss (gain) see below CHFO $ 10 x OX 1 x 1 X 1 x X 10 X 1 X 10 x 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. Translation Gain/Loss Schedule (in thousands) CHF $/CHF Exposed position, beginning CHE 1 x 1 * $ Net income 1 x 1 X Dividends 10 X 1 x 1 x 1 X 1 X 1 x CHE 1 X 1 x 1 x Exposed position, ending Translation gain $ 1 x