Pac of the United States purchased all the outstanding stock of Swi of Switzerland for $1,350,000 cash on January 1, 2011. The book values of Swi's assets and liabilities were equal to fair values on this date except for land, which was valued at 1,000,000 euros. Summarized balance sheet information in euros at January 1, 2011, is as follows:

The functional currency of Swi is the euro. Exchange rates for euros for 2011 are as follows:Spot rate January 1, 2011 $0.75Average rate 2011 0.76Current rate December 31, 2011 0.77REQUIRED: Determine the unrealized translation gain or loss at December 31, 2011, relating to the excess allocated to the undervaluedland.

Transcribed Image Text:

Eu 800,000 Current liabilities Bonds payable Capital stock Retained earnings Current assets Land Buildings-net Eu 400,000 500,000 1,000,000 400,000 500,000 Eu 2,300,000 Equipment-net 400,000 Eu 2,300,000