Part A

Kowloon Ltd operates in several segments.Data on these segments as at 30 June 2020 can be seen below.Having performed the initial analysis required under AASB 8, the accountant of Kowloon Ltd believes there are 4 reportable segments: A, B, E, and F.

Operating segments

Segment A

Segment B

Segment C

Segment D

Segment E

Segment F

Intra-group

Total

Segment revenues:

Revenue from external sales

800

760

400

100

1000

2500

0

5560

Revenue from transactions with other segments

255

100

0

185

85

1500

-2125

0

Total segment sales revenue

1055

860

400

285

1085

4000

-2125

5560

Other segment revenues

225

100

0

50

0

0

0

375

Total revenue

1280

960

400

335

1085

4000

-2125

5935

Test 1(a): Sales revenue analysis

15.9%

11.9%

5.0%

4.2%

13.5%

49.6%

Segment profit/loss

438

137

53

-79

72

687

-15

1293

Test 1(b): Segment result analysis

31.6 %

9.9%

3.8%

5.7 %

5.2 %

49.5 %

Unallocated revenue

1,425

Unallocated expenses

-625

Profit before income tax

2,093

Income tax expense

-143

Profit (loss) for period

1,950

Segment assets

1650

1400

550

600

1250

3000

8450

Unallocated assets

350

Test 1(c): Asset analysis

19.5%

16.6%

6.5%

7.1%

14.8%

35.5%

Total Assets

8800

Segment liabilities

1000

950

175

400

650

2500

5675

Unallocated liabilities

1250

Total liabilities

6925

Question 2 continued overleaf

Question 2 continued

Required:

(a)Do you agree with the accountant, that the reportable segments are A, B, E, and F? Why/Why not?Justify your answer, using the calculations above, and any additional calculations that may be required.

(10 marks)

Answer for Question 2 - Part A:

End of Part A

Question 2 continued overleaf

Question 2 continued

Part B

The accounts listed below are for the foreign subsidiary of an Australian company.Indicate the exchange rate that would be used to translate the foreign currency balances of these accounts into Australian dollars assuming:

(a)The Australian dollar is the functional currency.

(b)The foreign currency is the functional currency; and

In the table provided below, use the following letters to indicate the appropriate exchange rate:

H - historical exchange rate

C - current exchange rate at the end of the current period

A - average exchange rate for the current period

Answer for Question 2 Part B:

Account

A$ is the functional currency

The foreign currency is the functional currency

Cost of sales

General Reserve

Patents and Trademarks

Goodwill

Deferred Tax Asset

Motor Vehicles (MV)

Inventory

Accumulated Deprec - MV

Rent Expense

Depreciation expense