Banjo Ltd acquired 100% of Wellington Ltd on 1 July 2021. The balance sheet of Wellington Ltd on that date was as follows: $\text { Balance sheet at } 1 \text { July } 2021$ $\begin{array}{llll}&N Z \$&&N Z \$\\ \text { Machinery at cost } & 560,000 & \text { Share capital } & 400,000 \\ \text { Investment property } & 400,000 & \text { General reserve } & 200,000 \\ \text { Receivables } & 100,000 & \text { Retained earnings } & 600,000\\ \text { Cash }&140,000&&1,200,000\\&1,200,000 \end{array}$ The balance sheet of Wellington Ltd as at 30 June 2022 is as follows: Balance sheet as at 30 June 2022 $\begin{array}{lll}&N Z \$&&N Z \$\\ \text { Machinery - carrying value } & 300,000 & \text { Share capital }&400,000 \\ \text { Investment property } & 400,000 & \text { General Reserve }&200,000 \\ \text { Receivables } & 500,000 & \text { Retained earnings }&1,000,000 \\ \text { Cash } & 600,000 & \text { Accounts payable }&170,000\\ &&\text { Income tax payable }&30,000\\&1,800,000&&1,800,000 \end{array}$ Relevant exchange rates are as follows: $\begin{array}{lll}&\mathrm{NZ} \$&A\$\\ 1 \text { July } 2021 & 1.00= & 0.95 \\ \text { 30 June 2022 } & 1.00= & 0.85 \\ \text { Average 2021-22 } & 1.00= & 0.90 \end{array}$ If the functional currency of Wellington Ltd is New Zealand dollars and the presentation currency is Australian dollars the total assets of NZ$1,800 000 would translate into Australian dollars as:

A) $1,560,000 B) $1,530,000 C) $1,710,000 D) $1,620,000 A) $1,560,000 B) $1,530,000 C) $1,710,000 D) $1,620,000

Exam 24: Translation of Foreign Currency Financial Statements

Banjo Ltd acquired 100% of Wellington Ltd on 1 July 2021. The balance sheet of Wellington Ltd on that date was as follows: $\text { Balance sheet at } 1 \text { July } 2021$ NZ\& NZ \ Machinery at cost 560,000 Share capital 400,000 Investment property 400,000 General reserve 200,000 Receivables 100,000 Retained earnings 600,000 Cash 140,000 1,200,000 1,200,000 The balance sheet of Wellington Ltd as at 30 June 2022 is as follows: Balance sheet as at 30 June 2022 NZ\& NZ \ Machinery - carrying value 300,000 Share capital 400,000 Investment property 400,000 General Reserve 200,000 Receivables 500,000 Retained earnings 1,000,000 Cash 600,000 Accounts payable 170,000 Income tax payable 30,000 1,800,000 1,800,000 Relevant exchange rates are as follows: \&A \ 1 July 2021 1.00= 0.95 30 June 2022 1.00= 0.85 Average 2021-22 1.00= 0.90 If the functional currency of Wellington Ltd is New Zealand dollars and the presentation currency is Australian dollars the total assets of NZ$1,800 000 would translate into Australian dollars as:

(Multiple Choice)

4.9/5

(90)

Question 21

According to AASB 121 The Effects of Changes in Foreign Exchange Rates, the currency in which the financial statements are presented by the reporting entity is the:

(Multiple Choice)

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(74)

Question 22

Showing 21 - 22 of 22

According to AASB 121 The Effects of Changes in Foreign Exchange Rates, the currency in which the financial statements are presented by the reporting entity is the:

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