We need to complete our remeasurement of the income statement. Since beginning retained earnings for the year were zero, we know that net income on the remeasured income must be equal to ending retained earnings. The remeasurement gain or loss is the plug figure that causes this to be the case.
|
Income Statement (in SF thousands)
December 31, 2008 |
| Sales |
7,000 × 0.80 = |
$5,600 |
| COGS |
(6,800) × 0.80 = |
$5,440 |
| Depreciation |
100 × 0.77 = |
= $77 |
| Income before remeasurement gain/loss |
|
= $83 |
|
| Remeasurement gain = Plug |
|
= $18 |
| Net Income |
|
$101 |
|
