On 1 January 2020, Talented Berhad acquired a 100% equity interest in an overseas subsidiary. Tender...

  

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On 1 January 2020, Talented Berhad acquired a 100% equity interest in an overseas subsidiary. Tender Private Limited for a cash consideration of RM410,000. On the date of acquisition, the share capital of Tender Private Limited consists of 1,100,000 ordinary shares of S$1 each and the retained profits were $$150,000. Tender Private Limited Statement of Profit or Loss and Movements in Retained Profits for the year ended 31 December 2020 S$'000 Sales 4,500.00 Cost of goods sold Opening inventories 500.00 Purchases 1,800.00 2,300.00 Less: Closing inventories 700.00 (1,600.00) 2,900.00 Gross profit Less: Expenses 100.00 Depreciation of property, plant & equipment Administration & other expenses 400.00 (500.00) Profit before taxation 2,400.00 Less: Taxation (300.00) Profit after taxation 2,100.00 Movements in Retained Profits Profit for the year 2,100.00 Pre-acquisition profit 150.00 Post-acquisition profits c/f 2,250.00 S$'000 Non-current assets 4,100.00 Current assets 900.00 Less: Current liabilities (1,500.00) Net current assets 3,500.00 Tender Private Limited Statement of Financial Position as at 31 December 2020 1,100.00 Share capital of S$1 each Pre-acquisition profits Profit for the year 150.00 2,250.00 3,500.00 Talented Berhad is using closing rate method to translate the financial statements of the foreign subsidiary. The rates of exchange are: Dates S$ to RM1 1 January 2020 4.0000 3.2000 Average for the year to 31 December 2020 31 December 2020 3.0000 Required: (1) Translate the Statement of Profit or Loss and Movements in Retained Profits of Tender Private Limited into the presentation currency for consolidation purpose. (ii) Translate the Statement of Financial Position of Tender Private Limited into the presentation currency for consolidation purpose. On 1 January 2020, Talented Berhad acquired a 100% equity interest in an overseas subsidiary. Tender Private Limited for a cash consideration of RM410,000. On the date of acquisition, the share capital of Tender Private Limited consists of 1,100,000 ordinary shares of S$1 each and the retained profits were $$150,000. Tender Private Limited Statement of Profit or Loss and Movements in Retained Profits for the year ended 31 December 2020 S$'000 Sales 4,500.00 Cost of goods sold Opening inventories 500.00 Purchases 1,800.00 2,300.00 Less: Closing inventories 700.00 (1,600.00) 2,900.00 Gross profit Less: Expenses 100.00 Depreciation of property, plant & equipment Administration & other expenses 400.00 (500.00) Profit before taxation 2,400.00 Less: Taxation (300.00) Profit after taxation 2,100.00 Movements in Retained Profits Profit for the year 2,100.00 Pre-acquisition profit 150.00 Post-acquisition profits c/f 2,250.00 S$'000 Non-current assets 4,100.00 Current assets 900.00 Less: Current liabilities (1,500.00) Net current assets 3,500.00 Tender Private Limited Statement of Financial Position as at 31 December 2020 1,100.00 Share capital of S$1 each Pre-acquisition profits Profit for the year 150.00 2,250.00 3,500.00 Talented Berhad is using closing rate method to translate the financial statements of the foreign subsidiary. The rates of exchange are: Dates S$ to RM1 1 January 2020 4.0000 3.2000 Average for the year to 31 December 2020 31 December 2020 3.0000 Required: (1) Translate the Statement of Profit or Loss and Movements in Retained Profits of Tender Private Limited into the presentation currency for consolidation purpose. (ii) Translate the Statement of Financial Position of Tender Private Limited into the presentation currency for consolidation purpose.

Answer rating: 100% (QA)

In closing rate method the assets and liabilities are valued restated at closing rate income and exp... View the full answer