Houston Corporation operates a branch operation in a foreign
country. Although this branch deals in pesos, the U.S. dollar is
viewed as its functional currency. Thus, a remeasurement is
necessary to produce financial information for external reporting
purposes. The branch began the year with 200,000 pesos in cash and
no other assets or liabilities. However, the branch immediately
used 110,000 pesos to acquire equipment. On May 1, it purchased
inventory costing 60,000 pesos for cash that it sold on July 1 for
74,000 pesos cash. The branch transferred 30,000 pesos to the
parent on October 1 and recorded depreciation on the equipment of
11,000 pesos for the year. Currency exchange rates for 1 peso
follow:

Never use plagiarized sources. Get Your Original Essay on
Question: Houston Corporation operates a branch operation in a foreign country. Although this branch deals …
Hire Professionals Just from $11/Page
Order Now Click here

  January
1
$
0.31
= 1 peso
  May 1 0.33 = 1
  July 1 0.35 = 1
  October 1 0.36 = 1
  December 31 0.37 = 1
  Average for the
year
0.34 = 1

What is the remeasurement gain to be recognized in the
consolidated income statement?

Open chat
Lets chat on via WhatsApp
Hello, Welcome to our WhatsApp support. Reply to this message to start a chat.