Concerned ple is a company whose functional currency is sterling () and has a financial year- end of 31 December. Concerned plc imports goods from Africa and the contracts are dominated in the local currency - the Kwacha (KW). 1 December 15 December 31 December Import of goods on credit Cash payment to supplier Reporting date all goods remain unsold The relevant exchange rates are as follows 1 December 15 December 31 December KW10 KW8 KW9 KW400,000 KW400,000 1 1 1 Required a) Explain and show how the two foreign currency transactions are translated. Transactions is a foreign currency to be translated into functional currency at the exchange rate (spot rate) on the date of the transaction. The exchange difference arising on the settlement date and on the translation of monetary balances are recognised in the statement of PL. b) Calculate the exchange difference arising on the settlement of the liability and state how the exchange difference is accounted for. c) Explain how the unsold inventory would be presented in the statement of financial position at the reporting date of 31 December.