Australian Limited is an Australian manufacturer of Merino wool sweaters. To expand their business, Australian Limited looked to foreign acquisitions to increase their market share. Therefore, on 1 July 2021, Australian Limited acquired 100% of Woodside Limited, a retailer of woolen garments which was incorporated in the United States. The net assets of Woodside Limited on that date consisted of:

	US$
Share capital	234,000
General reserve	19,500
Retained profits	97,500
Total equity	351,000

The relevant exchange rates for the period are as follows:

US$1 = A$

1 July 2021	1.5		Average for year 2021/2022	1.42
31 September 2021	1.49		Average (July – December 2021)	1.46
31 December 2021	1.42		Average (January – June 2022)	1.38
30 June 2022	1.37		Average for June 2022	1.36
31 July 2022	1.42

Additional information relating to Woodside Limited:

1. Sales are seasonal and do not occur evenly throughout the year. 45% of total sales are generated in the first six months from July to December and the balance from January to June.

2. All expenses occur evenly throughout the year, except for closing inventory, which was purchased on 30 June 2022, and interest on the bank loan, which is paid semi-annually (an amount of US$3,900) on 31 December and 30 June each year.

3. The dividend was paid on 30 September 2021 and the dividend declared on balance date and will be paid in August 2022.

4. An additional item of equipment was purchased on 30 September 2021 for US$39,000. No other items of property, plant and equipment were purchased or sold during the year. All plant and equipment are depreciated on a straight-line basis at the rate of 20% p.a.

5. Land was purchased on 31 December 2021 for US$87,750.

Required:

The functional currency is considered to be Australian Dollars (AUD$). Prepare the translation of the 30 June 2022 financial statements of Woodside Limited (in US$) into Australian Dollars (AUD$). Round all numbers to the nearest whole number.

Answer rating: 100% (QA)

US Rate A Sales 370500 166725 X 146 203775 X 138 524628 Opening Inventory 58500 15 87750 Purchases 234000 142 332280 Closing Inventory 68250 138 94185 ... View the full answer