Bangkok Instruments, Ltd., is the Thai affiliate of a U. S. seismic instrument manufacturer. Bangkok Instruments manufactures the instruments primarily for the oil and gas industry globally. Sales are primarily to multinational companies based in the United States and Europe. Bankok Instruments' balance sheet in thousands of Thai bahts (B) as of March 31st is as follows: Assets Liabilities & Net Worth
Cash 24,000 Accounts payable 18,000
Accounts receivable 36,000 Bank loans 60,000
Inventory 48,000 Common stock 18,000
Net plant & equipment 60,000 Retained earnings 72,000
B168,000 B168,000

Using the data presented, assume that the Thai baht dropped in value from B30/$ to B35/$ between March 31st and April 1st.

Assuming no change in balance sheet accounts between these two days,

a. Calculate the gain or loss from translation by both the current rate method and the temporal method.
b. Explain the translation gain or loss in terms of changes in the value of exposed accounts.