Julius is a European subsidiary of USA Corp. The functional currency of Julius is the U.S. dollar.
Balance Sheet Data for Julius, 31 December 20X2 (€ millions)
Cash 50 Liabilities 700
Accounts
receivable 100 Common stock 1,500
Inventory 700 Retained earnings 100
Fixed assets 1,450
Total assets 2,300 Total liabilities and equity 2,300
Exhibit 2. Exchange Rates ($/€)
31 December 20X1 1.47
31 December 20X2 1.61
20X2 average 1.54
Rate when fixed assets were acquired 1.25
Rate when 20X2 inventory was acquired 1.49
The exchange rate at the beginning of the period is used for common stock. The average exchange rate is used for retained earnings.
Compute the translation gain/loss for Julius