Hanover Inc. spent 11.5 million building a factory in England several years ago when the British Pound

Question:

Hanover Inc. spent £11.5 million building a factory in England several years ago when the British Pound cost $1.5500. The plant operation was set up as a British subsidiary to manufacture Hanover's product for sale and in the U.K. and Europe. Hanover closed its consolidated books for the 2015 fiscal year on May 6, 2015. (Many companies keep their books on fiscal years that don't coincide with calendar years.) Hanover is subject to a 40% tax rate in the U.S. and a 25% rate in the U.K.
a. How much did Hanover make or lose on the value of its English factory due to movements in the years since it was built? Use table 18.1.
b. Explain the tax impact of the gain or loss?
c. Where does the gain or loss show up in Hanover's financial statements? Where doesn't it show up in 2015 or in previous years.
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