An US parent company with functional and presentation currency of US$ acquired 35% of a Singapore joint venture on 31 December 20x2 at cash consideration of S$800,000. The fair value of the net identifiable assets of the joint venture at the date of acquisition was S$710,000 and the exchange rate at the date of acquisition was 1.55.

On 31 December 20x5, 15% of the interests in the Singapore joint venture with balance sheet in S$ as set out below was disposed for cash consideration of US$4,000,000.

The relevant exchange rates are also set out as follows.

Calculate the gain or loss on disposal, and prepare the accounting entries in the separate and consolidated financial statements. Assume that the US parent company has other subsidiaries and it prepares both consolidated and separate financial statements. Ignore tax effects.

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Balance Sheet at 31 December 20x5 $$'000 86,600 Other assets.... Other liabilities.. (5,800) 80,800 Represented by: Share capital... Retained earnings 800 80,000 80,800 Breakdown of retained earnings 5$'000 3,300 18,200 22,500 36,000 80,000 20x2 Balance at beginning....... 20x3 Profit for the year. 20x4 Profit for the year........ 20x5 Profit for the year.