Par Industries, a U.S. Corporation, purchased Slice Company of New Zealand for $1,411,800 on January 1, 2014. Slice's functional currency is the New Zealand dollar (NZ$). Slice's books are kept in NZ$. The book values of Slice's assets and liabilities were equal to fair values, with the exception of land which was valued at NZ$1,300,000. Slice's balance sheet appears below:
Relevant exchange rates are shown below:
Required:
Determine the unrealized translation gain or loss at December 31, 2014 relating to the excess allocated to the undervalued land.

Question

Par Industries, a U.S. Corporation, purchased Slice Company of New Zealand for $1,411,800 on January 1, 2014. Slice's functional currency is the New Zealand dollar (NZ$). Slice's books are kept in NZ$. The book values of Slice's assets and liabilities were equal to fair values, with the exception of land which was valued at NZ$1,300,000. Slice's balance sheet appears below:
  Relevant exchange rates are shown below:
  Required:
Determine the unrealized translation gain or loss at December 31, 2014 relating to the excess allocated to the undervalued land.

Quizplus · Accepted Answer

The Answer of Par Industries, a U.S. Corporation, purchased Slice Company of New Zealand for $1,411,800 on January 1, 2014. Slice's functional currency is the New Zealand dollar (NZ$). Slice's books are kept in NZ$. The book values of Slice's assets and liabilities were equal to fair values, with the exception of land which was valued at NZ$1,300,000. Slice's balance sheet appears below:
  Relevant exchange rates are shown below:
  Required:
Determine the unrealized translation gain or loss at December 31, 2014 relating to the excess allocated to the undervalued land.