Calculate the foreign currency translation reserve

Assignment Help Accounting Basics
Reference no: EM133113624

Question - On 1 July 2019, an Australian company Frankston Ltd acquired all the issued shares of in Boston Ltd, a company incorporated in the United States (US). At this date Boston Ltd had the following account balances:


US$

Bank loan

4,000

Plant and equipment

4,200

Cash and debtors

400

Inventory

2,000

Retained earnings

600

Other account balances for Boston Ltd at 30th June 2020 are as follows:

 

US $ Dr

US $ Cr

Share capital


2,000

Retained earnings


1,200

Bank loan


4,000

Accounts payable


1,600

Sales


10,000

Plant and equipment

3,800


Cash and debtors

3,200


Inventory

1,800


Purchases

8,000


Administration expense

300


Depreciation expense

400


Income tax expense

500


Exchange rates for the year ending 30 June 2020 are as follows:

1 July 2019

US$1 = A$1.50

30 June 2020

US$1 = A$1.70

Average for year

US$1 = A$1.60

Ending inventory acquired (before year end)

US$1 = A$1.65

Required -

a) Prepare the Statement of profit or loss and other comprehensive income and the statement of financial position of the foreign operation at 30 June 2020, assuming that the US dollar is the functional currency of Boston Ltd and the Australian dollar is the presentation currency of the group.

B) Calculate the foreign currency translation reserve.

Reference no: EM133113624

Questions Cloud

Despite the moral hazard problem : Deposit Insurance has become a growing trend around the world despite the moral hazard problem it creates. Explain this problem, why the existence of this probl
Calculate the forward rate offered by the bank : Given the following (simplified) data, calculate the forward rate offered by the bank. Both countries use a 365-day year; assume 30-day contract.
Design process as a fundamental phase : Design process as a fundamental phase of engineering projects and develop students' skills in communication, design and graphic representations
Typical venture capital fund : Maguire Ventures Fund III is a typical venture capital fund (except for the small number of investments it made, which is a simplification to make this question
Calculate the foreign currency translation reserve : On 1 July 2019, an Australian company Frankston Ltd acquired all the issued shares of in Boston Ltd, Calculate the foreign currency translation reserve
Calculate black-scholes value of the option : You are expecting XYZ stock price to go down in next 3 months, however you are not completely sure. So you decide to use just one option, either European call o
Why amazon might want additional capital : Select a business (real or fictitious) and provide a brief summary of their operations Describe why they might want additional capital Describe the current (or
Problem about expected return : (5-5) Expected performance. Market and Stock J have the following probability distribution:
Interest rate cap or floor in today marketplace : Assess the volatility risk with an investment in a derivative, using an interest rate cap or floor in today's marketplace. Indicate whether or not you would adv

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd