A Belgium subsidiary's beginning and ending trial balancesappear below:
| January 1 | December 31 |
Cash, receivables | € 1,500 | € 1,200 |
Inventories | 3,000 | 3,500 |
Plant & equipment, net | 30,000 | 39,000 |
Liabilities | (18,500) | (27,200) |
Capital stock | (4,000) | (4,000) |
Retained earnings, beginning | (12,000) | (12,000) |
Sales revenue | -- | (15,000) |
Cost of sales | | 9,500 |
Out-of-pocket selling & administrative expenses | -- | 4,000 |
Depreciation expense | -- | 1,000 |
Total | € 0 | € 0 |
Exchange rates ($/€) are:
Beginning of year | $1.25 |
Average for year | 1.22 |
End of year | 1.20 |
The subsidiary was acquired at the beginning of the year. Itssales, inventory purchases, and out-of-pocket selling andadministrative expenses occurred evenly during the year. Equipmentwas purchased for €10,000 when the exchange rate was $1.23.Depreciation for the year includes €200 related to the equipmentpurchased during the year. The ending inventory was purchased atthe end of the year, and the beginning inventory was purchased atthe end of the previous year.
If the subsidiary's functional currency is the euro, what is thetranslation gain or loss for the year?
| A. | $810 loss |
| B. | $1,130 gain |
| C. | $2,020 loss |
| D. | $1,030 gain |
