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Ganado Europe (D). Using facts in the chapter for Ganado Europe, assume that the exchange rate on January 2, 2016, in Exhibit 11,6 appreciated from $11000 to $15400 Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the temporal rate method as shown in the popup window a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss (Round to the nearest dollar) Data table EXHIBIT 11.6 Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method December 31, 2015 Translated Accounts (US$) January 2, 2016 Exchange Rate (US$/euro) Translated Accounts (US$) $1,848,000 Exchange Rate Assets Cash In Euros (6) (US$/euro) 1,200,000 1.1000 $1,320,000 1.5400 Accounts receivable 2,500,000 1.1000 2,750,000 1.5400 3,850,000 Inventory 3,000,000 1.1210 3,363,000 1.1210 3,363,000 Net plant and equipment 4,600,000 1.1780 5,418,800 1.1780 5,418,800 Total 11,300,000 $12,851,800 $14,479,800 Print Done - X 00 $12,851,800 $14,479,800 Liabilities and Net Worth Accounts payable 1,100,000 1.1000 $1,210,000 1.5400 $1,694,000 Short-term bank debt 1,600,000 1.1000 1,760,000 1.5400 2,464,000 Long-term debt 1,700,000 1.1000 1,870,000 1.5400 2,618,000 Common stock 1,700,000 1.1780 2,002,600 1.1780 2,002,600 Retained earnings 5,200,000 1.1484 (a) 6,009,200 1.1484 (b) 6,009,200 Translation gain (loss) (c) " Total 11,300,000 $12,851,800 $14,479,800 Enrior years $14,479,800 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year (b) Translated into dollars at the same rate as before depreciation of the euro (c) Under the temporal method, the translation loss would be closed into retained earnings through the income statement rather than left as a separate line item as shown here

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