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 400,000 pesos in cash and no other assets or liabilities. However, the branch immediately used 210,000 pesos to acquire equipment. On May 1, it purchased inventory costing 120,000 pesos for cash that it sold on July 1 for 140,000 pesos cash. The branch transferred 70,000 pesos to the parent on October 1 and recorded depreciation on the equipment of 21,000 pesos for the year. Currency exchange rates for 1 peso follow: January 1 $ 0.61 = 1 peso May 1 0.63 = 1 July 1 0.65 = 1 October 1 0.66 = 1 December 31 0.67 = 1 Average for the year 0.64 = 1 What is the remeasurement gain to be recognized in the consolidated income statement? $8,700. $8,400. $13,200. $10,950. ©2016 McGraw-Hill Education. All rights reserved.