determine the unrealized translation gain or loss at december 31 2011 related to the 571972

Acquisition—Excess allocation and amortization effect

Pal acquired all the stock of Sta of Britain on January 1, 2011, for $163,800, when Sta had capital stock of £60,000 and retained earnings of £30,000. Sta’s assets and liabilities were fairly valued, except for equipment with a three year life that was undervalued by £6,000. Any remaining excess is due to a patent with a useful life of 10 years. Sta’s functional currency is the pound. Exchange rates for British pounds are as follows:

REQUIRED

1. Determine the unrealized translation gain or loss at December 31, 2011, related to the cost/book value differential assigned to equipment.

2. Determine the unrealized translation gain or loss at December 31, 2011, related to the patent.