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	CHF 0	CHF 0

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	$1.03
Average for 2017	1.06
Average for December, 2017	1.08
December 31, 2017	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	Answer	Answer
Inventories	55,000	Answer	Answer
Plant and equipment, net	180,000	(1) below	Answer
Accounts and notes payable	(120,000)	Answer	Answer
Common stock	(40,000)	Answer	Answer
Retained earnings, beginning	(90,000)	Answer	Answer
Dividends	20,000	Answer	Answer
Sales	(500,000)	Answer	Answer
Cost of sales	375,000	(2) below	Answer
Operating expenses	75,000	(3) below	Answer
Remeasurement (gain) or loss	--	(4) below	Answer
	CHF 0		Answer

Do not use negative signs with any of your answers below.

(1) Plant and equipment, net (in thousands)
	CHF	$/CHF	$
Plant and equipment, net: purchased prior to 2017	Answer	Answer	Answer
Plant and equipment, net: purchased during 2017	Answer	Answer	Answer
	Answer		Answer

Do not use negative signs with any of your answers below.

(2) Cost of Sales (in thousands)
	CHF	$/CHF	$
Beginning inventory	Answer	Answer	Answer
Purchases	Answer	Answer	Answer
Ending inventory	Answer	Answer	Answer
Cost of sales	Answer		Answer

Do not use negative signs with any of your answers below.

(3) Operating expenses (in thousands)
	CHF	$/CHF	$
Depreciation (for P&E purchased prior to 2017)	Answer	Answer	Answer
Depreciation (for P&E purchased in 2017)	Answer	Answer	Answer
Other operating expenses	Answer	Answer	Answer
Total	Answer		Answer

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)
	CHF	$/CHF	$
Exposed position, beginning	Answer	Answer	Answer
Sales	Answer	Answer	Answer
Purchases	Answer	Answer	Answer
Cash operating expenses	Answer	Answer	Answer
Dividends	Answer	Answer	Answer
Plant and equipment acquisition	Answer	Answer	Answer
			Answer
Exposed position, ending	Answer	Answer	Answer
Answer

Answer

(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.

Translated Trial Balance December 31 2017
	CHF Dr(Cr)	$/CHF	$ Dr(Cr)
Cash, receivables	CHF45,000	Answer	Answer
Inventories	55,000	Answer	Answer
Plant and equipment, net	180,000	Answer	Answer
Accounts and notes payable	(120,000)	Answer	Answer
Common stock	(40,000)	Answer	Answer
Retained earnings, beginning	(90,000)	Answer	Answer
Dividends	20,000	Answer	Answer
Sales	(500,000)	Answer	Answer
Cost of sales	375,000	Answer	Answer
Operating expenses	75,000	Answer	Answer
Translation loss (gain)		see below	Answer
	CHF 0		Answer

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	Answer	Answer	Answer
Net income	Answer	Answer	Answer
Dividends	Answer	Answer	Answer
			Answer
Exposed position, ending	Answer	Answer	Answer
Answer

Answer