Use the Following Information to Answer Bellow Questions
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Use the following information to answer bellow Questions
At the beginning of the current year, a U.S. company established a subsidiary in Canada, having the following balance sheet (shown in Canadian dollars, or C$) :
$\begin{array}{cccc} \text { Cash } & \mathrm{C} \$ 100,000 & \text { Liabilities } & \mathrm{C} \$ 200,000 \\ \text { Fixed assets, net } & \underline{300,000} & \text { Capital stock } &\underline{ 200,000} \\ \text { Total } & \mathrm{c} \$ 400,000 & \text { Total } & \mathrm{C} \$ 400,00 \\\end{array}$

$\text { At the end of the year, the subsidiary reported the following trial balance: }$

$\begin{array}{lr}&\operatorname{Dr}(\mathrm{Cr}) \\\hline\text { Cash } & \text { C\$ 200,000 } \\\text { Fixed assets, net } & 240,000 \\\text { Liabilities } & (220,000) \\\text { Capital stock } & (200,000) \\\text { Sales } & (500,000) \\\text { Depreciation expense } & 60,000 \\\text { Out-of-pocket expenses } & \underline{420,000 }\\&c\$0\end{array}$


$\text { Exchange rates are as follows: }$

$\begin{array}{lr}\text { Beginning of year } & \$ 0.85 \\\text { Average for year } & 0.82 \\\text { End of year } & 0.80\end{array}$

-What is the gain or loss that occurs when the subsidiary's trial balance is remeasured into U.S. dollars?

A) $3,400 loss
B) $2,600 gain
C) $2,600 loss
D) $3,400 gain