If Apollo’s functional currency is the dollar, Apollo’s translated net profit is:

(a) $700,000

(b) $600,000

(c) $500,000

(d) $480,000 On 31 December 20x3, Zeus Ltd, whose functional currency is the dollar ($), incorporated a subsidiary, Apollo (X) Ltd, in country X, whose currency was the FC. Apollo operated a car rental business. The company was incorporated with a paid-up capital of FC 2,000,000. On 31 December 20x3, Apollo purchased a fleet of cars that cost FC 2,000,000. During 20x4, Apollo earned FC 1,000,000 from rental income. Depreciation for the year was FC 200,000. At the end of 20x4, Apollo had a cash balance of FC 1,000,000. Exchange rates are as follows:

Transcribed Image Text:

31 December 20x3. 31 December 20x4. Average for 20x4. FC 1= $0.50 FC 1 = $0.70 FC 1 = $0.60