Question: Refer to the information in Problem P12 23 Assume the U S

Refer to the information in Problem P12-23. Assume the U.S. dollar is the functional currency.
In P12-23
Additional Information
1. Western Ranching uses average cost for cost of goods sold. Inventory increased by A $20,000 during the year. Purchases were made uniformly during 20X3. The ending inventory was acquired at the average exchange rate for the year.
2. Plant and equipment were acquired as follows:
Date Cost
January 20X1 ........A$180,000
January 1, 20X3....... 60,000

3. Plant and equipment are depreciated using the straight-line method and a 10-year life with no residual value.
4. The payable to Alamo is in Australian dollars. Alamo’s books show a receivable from Western Ranching of $6,480.
5. The 10-year bonds were issued on July 1, 20X3, for A$106,000. The premium is amortized on a straight-line basis. The interest is paid on April 1 and October 1.
6. The dividends were declared and paid on April 1.
7. Exchange rates were as follows:
A$ $
January 20X1...... 1 = 0.93
August 20X1 ....... 1 = 0.88
January 1, 20X3 ..... 1 = 0.70
April 1, 20X3 .......1 = 0.67
July 1, 20X3 .........1 = 0.64
December 31, 20X3 ......1 = 0.60
20X3 average .......1 = 0.65

a. Prepare a schedule remeasuring the December 31, 20X3, trial balance of Western Ranching from Australian dollars to U.S. dollars.
b. Prepare a schedule providing a proof of the remeasurement gain or loss. The subsidiary’s net monetary liability position on January 1, 20X3, was A$80,000.

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