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Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros,...

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Accounting

Charleston Corporation operates a branch operation in a foreigncountry. Although this branch operates in euros, the U.S. dollar isits functional currency. Thus, a remeasurement is necessary toproduce financial information for external reporting purposes. Thebranch began the year with 504,000 euros in cash and no otherassets or liabilities. However, the branch immediately used 312,000euros to acquire a warehouse. On May 1, it purchased inventorycosting 127,000 euros for cash that it sold on July 1 for 182,000euros cash. The branch transferred 26,000 euros to the parent onOctober 1 and recorded depreciation on the warehouse of 11,000euros for the year. Currency exchange rates for 1 euro follow:January 1 $1.47 = 1 euro May 1 1.51 = 1 July 1 1.53 = 1 October 11.51 = 1 December 31 1.41 = 1 Average for the year 1.49 = 1 What isthe remeasurement gain or loss to be recognized in the consolidatedincome statement? rev: 07_22_2017_QC_CS-91913 Multiple Choice$18,060 gain. $18,060 loss. $190 loss. $190 gain.

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