The following account balances are for the Agee Company as of January 1, 2020, and December 31, 2020. All amounts are denominated in kroner (Kr). January 1, 2020 December 31, 2020
Accounts payable (8,000 ) (16,500 )
Accounts receivable 35,000 85,000
Accumulated depreciation—buildings (26,000 ) (31,000 )
Accumulated depreciation—equipment 0 (5,600 )
Bonds payable—due 2023 (56,000 ) (56,000 )
Buildings 115,000 95,500
Cash 41,000 8,600
Common stock (65,000 ) (80,000 )
Depreciation expense 0 21,000
Dividends (10/1/20) 0 38,000
Equipment 0 36,000
Gain on sale of building 0 (6,600 )
Rent expense 0 17,600
Retained earnings (36,000 ) (36,000 )
Salary expense 0 26,000
Sales 0 (104,000 )
Utilities expense 0 8,000
Additional Information
Agee issued additional shares of common stock during the year on April 1, 2020. Common stock at January 1, 2020, was sold at the start of operations in 2013.
Agee purchased buildings in 2014 and sold one building with a book value of Kr 9,100 on July 1 of the current year.
Equipment was acquired on April 1, 2020.
relevant exchange rates for 1 Kr were as follows:
2013 $ 2.70
2014 2.50
January 1, 2020 2.80
April 1, 2020 2.90
July 1, 2020 3.10
October 1, 2020 3.20
December 31, 2020 3.30
Average for 2020 3.00
A. Assuming the U. S. dollar is the functional currency, what is the remeasurement gain or loss for 2020? The December 31, 2019, U. S. dollar-translated balance sheet reported retained earnings of $80,600, which included a remeasurement loss of $12,500.
B. Assuming the foreign currency is the functional currency, what is the translation adjustment for 2020? The December 31, 2019, U. S. dollar-translated balance sheet reported retained earnings of $95,000 and a cumulative translation adjustment of $12,300 (credit balance).