On December $18,2024,$ Stephkado Corporation acquired $100$ percent of a SwIss company for $4\mathrm{.}012$ million Swlss francs $($CHF$).$ which is

Indicatlive of book and fair value. At the acquisition date, the exchange rate was $$1\mathrm{.}00=$ CHF $1.$ On December $18,2024,$ the book and

falr values of the subsidlary's assets and liabilitles were as follows:

Stephkado prepares consolidated financlal statements on December $31,2024.$ By that date, the SwIss franc has appreclated to $$1\mathrm{.}10=$

CHF $1.$ Because of the year$-$end holidays, no transactions took place prior to consolidation. Property, plant, and equipment is

depreclated using a units$-$of$-$production method, so no depreclation is required from December $18$ to December $31.$ The Swiss

subsidlary has no revenues and no expenses from December $18$ to December $31,$ and its book value is unchanged from December $18$

to December $31.$

Required:

a$.$ Determine the translation adjustment to be reported on Stephkado's December $31,2024,$ consolidated balance sheet, assuming

that the SWiss franc is the SWiss subsidlary's functional currency. What is the economic relevance of this translation adjustment?

b$.$ Determine the remeasurement gain or loss to be reported In Stephkado's $2024$ consolidated net Income, assuming that the U$.$S$.$

dollar is the functional currency. What is the economic relevance of this remeasurement galn or loss?