Use the Trident Balance Sheet provided above to answer next two questions.

1. Assume the exchange rate on January 2, 2011 dropped in value from $1.2000/ to $0.9000/ .Recalculate Trident Europes translated Balance Sheet for January 2, 2011, with the new exchange rate using the current rate method.

1. What is the amount of translation gain or loss?
2. Where should it appear in financial statements?

2. Assume as in Question 1 above that the exchange rate on January 2, 2011 dropped in value from $1.2000/ to $0.9000. Recalculate Trident Europes translated Balance Sheet for January 2, 2011, with the new exchange rate using the temporal rate method.

1. What is the amount of translation gain or loss?
2. Where should it appear in financial statements?
3. Why does the translation loss or gain under the temporal method differ from the loss or gain under the current rate method?

January 2 2011 Translated Accounts ASSETS Trident Europe's Balance Sheet December 31, 2010 In Euros () Exorate Translated Exerate ($/) Accounts ($) ($/) 1,600,000 1.2000 1,920,000 3,200,000 1.2000 3,840,000 2,400,000 1.2000 2,880,000 4,800,000 1.2000 5,760,000 Cashe Acc.Res. Inventory Net Plant & Equipment TOTAL ????? ????? ????? ????? 12,000,000 14,400,000 LIAB.&O.EQUITY Accounts Payable 80,000 Short-term debte 1,600,000 Long-term debt 1,600,000 Common stocke 1,800,000 Retained earnings 6,200,000 1.2000 1.2000 1.2000 1.2760 1.2000 960,000 1,920,000 1,920,000 2,296,800 7,440,000 ????? ????? ????? ????? ????? TOTAL 12,000,000 14,400,000