Neo Ltd$,$ a company whose functional currency is the Rand $($R$),$ was established on

$10$ September $2019$ in Country R$.$ On $3$ January $2022,70\%$ of Neo Ltd was acquired

by the Malaysian company, Mac Berhad for R$18\mathrm{.}2$ million. At the date of acquisition,

the retained profits of Neo amounted to R$3\mathrm{.}2$ million and the fair value of the

identifiable net assets of Neo closely approximated their book values.

Below are income statements for Company Mac Berhad and Company Neo Ltd$.$

Summarised Income Statements for the year ended $31$ December $2023$

Mac

Neo

RM$000$

R$000$

Revenue

$89,300$

$37,890$

Cost of sales

$(22,000)$

$(13,640)$

Gross profit

$67,300$

$24,250$

Other net expenses

$(30,000)$

$(8,690)$

Dividend received from Neo

$400$

$-$

Finance cost

$(1,100)$

$(600)$

Profit before tax

$36,600$

$14,960$

Taxation

$(10,400)$

$(6,880)$

Profit for the year

$26,200$

$8,080$

Statement of Retained Profits for the year ended $31$ December $2023$

Mac

Neo

RM$000$

RM$000$

At $1$ January $2023$

$23,665$

$21,050$

Profit for the period

$26,200$

$8,080$

Dividends paid

$(12,000)$

$(2,800)$

At $31$ December $2023$

$37,865$

$26,330$

Summarised Balance Sheets as at $31$ December $2023$

Mac

Neo

RM$000$

RM$000$

Non$-$current assets

Property, plant and equipment

Cost

$100,000$

$44,998$

Accumulated depreciation

$(32,800)$

$(9,398)$

Investment, at cost$10,500,000,$shares in Neo

$2,600$

$-$

$69,800$

$35,600$

Current Assets

Inventories

$18,130$

$13,860$

Receivables

$15,600$

$16,120$

Cash and bank balances

$2,165$

$3,270$

Current Liabilities

Payables

$(17,430)$

$(14,720)$

Taxation

$(10,400)$

$(6,800)$

Net current assets

$8,065$

$11,730$

$77,865$

$47,330$

Capital and reserves

Share capital

$25,000$

$15,000$

Retained profits

$37,865$

$26,330$

$62,865$

$41,330$

Non$-$current liabilities

Loans

$15,000$

$6,000$

$77,865$

$47,330$

Additional Information

$($a$)$The relevant rate exchange are as follows:

R to RM$1$

$31$ December $2019$

$7\mathrm{.}0$

$31$ December $2022$

$5\mathrm{.}6$

Average for $2023$

$5\mathrm{.}1$

$31$ December $2023$

$4\mathrm{.}6$

$($b$)$The consolidated translation reserve at $31$ December $2022$ consists of the following:

RM$000$

Gain on retranslation of goodwill

$195$

Group share of exchange differences arising from

translation into presentation currency

$1,092$

$1,287$

$($c$)$When Neo paid the dividends of R$2\mathrm{.}8$ million, the exchange ratewas R$4\mathrm{.}90/$ RM$1.$

Required:

Translate the financial statements of Neo Berhad from its functional currency to the

presentation currency.

$(15$marks$)$