Question

. Zugar Company is domiciled in a country whose currency is the dinar. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency.
- Zugar begins 2017 with the following assets: cash of 20,000 dinars, accounts receivable of 80,000 dinars, marketable securities of 50,000, and land that cost 150,000 dinars when acquired on April 1, 2016.
- On January 1, 2017, Zugar has a 170,000 dinar note payable, and no other liabilities.
- On May 1, 2017, Zugar sold inventory to a customer for 130,000 dinars, which was immediately paid in cash.
-Zugar recorded cost of goods sold for the inventory, which was purchased back in April 1, 2016 for 90,000 dinars.
- Inventory is recorded at cost.
- No other transactions occurred during the year.
- Assume that the U.S. dollar is the subsidiary's functional currency.
- Assume the beginning balance at 1/1/2017 consists of 80,000 dinars.

-Assume the following exchange rates:

1 dinar is equal to:

4/1/16: $0.33

1/1/17: $0.36

5/1/17: $0.37

6/1/17: $0.39

12/31/17: $0.41

Average 2017: $0.38

- What is the remeasurement gain or loss for this subsidiary for the year 2017?

(You must show work to earn points. Write out and label each component.)

		9,200 debit
		7,200 credit
		2,000 credit
		9,200 credit
		7,200 debit

Answer 1