Pal acquired all the stock of Sta of Britain on January 1, 2016, for $163,800, when Sta had capital stock of £60,000 and retained earnings of £30,000. Sta's assets and liabilities were fairly valued, except for equipment with a three-year life that was undervalued by £6,000. Any remaining excess is due to a patent with a useful life of 10 years.

Sta's functional currency is the pound. Exchange rates for British pounds are as follows:

January 1, 2016 ...........................$1.66

Average for the year 2016 ............. 1.65

December 31, 2016 ...................... 1.64

REQUIRED

1. Determine the unrealized translation gain or loss at December 31, 2016, related to the cost/book value differential assigned to equipment.

2. Determine the unrealized translation gain or loss at December 31, 2016, related to the patent.