Artisan Ltd acquired all the issued shares of Burwood Ltd on 1 July 2020. Artisan Ltd...

Transcribed Image Text:

Artisan Ltd acquired all the issued shares of Burwood Ltd on 1 July 2020. Artisan Ltd is located in Australia whilst Burwood Ltd is a NZ company. A junior accountant of Burwood Ltd was asked to prepare the financial statements as at 30 June 2021 in the presentation currency of Australia dollars for reporting purposes for Artisan Ltd. The functional currency for Burwood Ltd is the Australian $. The accountant is unsure if they have translated the following accounts correctly where: H - historical exchange rate C - current exchange rate at the end of the current period A - average exchange rate for the current period Account Dividend declared Current tax liability Inventory Depreciation expense Exchange rate C H H A Required: Which method does the junior accountant need to use to translate the accounts of Burwood Ltd? For each account indicate if the correct exchange rate has been identified and briefly explain why or why not. Artisan Ltd acquired all the issued shares of Burwood Ltd on 1 July 2020. Artisan Ltd is located in Australia whilst Burwood Ltd is a NZ company. A junior accountant of Burwood Ltd was asked to prepare the financial statements as at 30 June 2021 in the presentation currency of Australia dollars for reporting purposes for Artisan Ltd. The functional currency for Burwood Ltd is the Australian $. The accountant is unsure if they have translated the following accounts correctly where: H - historical exchange rate C - current exchange rate at the end of the current period A - average exchange rate for the current period Account Dividend declared Current tax liability Inventory Depreciation expense Exchange rate C H H A Required: Which method does the junior accountant need to use to translate the accounts of Burwood Ltd? For each account indicate if the correct exchange rate has been identified and briefly explain why or why not.

Answer rating: 100% (QA)

There are two methods for handling currency translationsCurrent rate method and the temporal method ... View the full answer