Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2011, in Exhibit 11.5 appreciated from $1.1000/ to $1.5900/.

Calculate Ganado Europe's translated balance sheet for January 2, 2011, with the new exchange rate using the current rate method as shown:

EXHIBIT 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method
					December 31, 2010						January 2, 2011
Assets		In Euros			Exchange Rate (US$/euro)			Translated Accounts (US$)			Exchange Rate (US$/euro)			Translated Accounts (US$)
Cash		$1,700,000			1.1000			$1,870,000			1.5900			$2,703,000
Accounts receivable		2,500,000			1.1000			2,750,000			1.5900			3,975,000
Inventory		2,700,000			1.1000			2,970,000			1.5900			4,293,000
Net plant and equipment		4,900,000			1.1000			5,390,000			1.5900			7,791,000
Total		11,800,000						$12,980,000						$18,762,000
Liabilities and Net Worth
Accounts payable		1,200,000			1.1000			$1,320,000			1.5900			$1,908,000
Short-term bank debt		1,000,000			1.1000			1,100,000			1.5900			1,590,000
Long-term debt		1,900,000			1.1000			2,090,000			1.5900			3,021,000
Common stock		2,100,000			1.1530			2,421,300			1.1530			2,421,300
Retained earnings		5,600,000			1.1000	(a)		6,160,000			1.1000	(b)		6,160,000
Translation adjustment (CTA)								(111,300)						3,661,700
Total		11,800,000						12,980,000						18,762,000
(a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year.
(b) Translated into dollars at the same rate as before depreciation of the euro.

a. What is the amount of translation gain or loss?

b. Where should it appear in the financial statements?