A U.S. parent owns all of the stock of an Italian subsidiary. The subsidiary's January 1 and

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Question:

A U.S. parent owns all of the stock of an Italian subsidiary. The

subsidiary's January 1 and December 31, 2020 trial balances are as follows, in euros:
December 31, 2020, January 1, 2020
Dr (Cr) Dr (Cr)
Cash, receivables € 180,000 € 200,000
Inventories at FIFO cost € 500,000 € 400,000
Plant & equipment, net € 1,300,000 € 1,600,000
Liabilities € (1,080,000) € (1,400,000)
Capital stock € (200,000) € (200,000)
Retained earnings, beginning € (600,000) € (600,000)
Dividends € 100,000
Sales revenue € (4,000,000)
Cost of goods sold € 2,300,000
Depreciation expense € 300,000
Out of pocket expenses € 1,200,000
€ 0 € 0
Sales, purchases, and recurring out of pocket expenses occurred evenly throughout the year. Exchange rates ($/€) are:
January 1, 2020 $ 1.45
Average for 2020 $ 1.35
Rate when dividends declared $ 1.32
December 31,2020 $1.30

Question 7.3: Assume the subsidiary's functional currency is the euro. What is the translation gain or loss for 2020?

Question 7.4 Assume the subsidiary's functional currency is the U.S. dollar. What is the remeasurement gain or loss?