QUESTION 5 - Foreign Currency Translation (5 Marks) On 1 January 20X0, Outback Ltd, an Australian company, formed a Pacific Island trading company, Aloha Ltd. Outback Ltd holds 100% of the shares in Aloha Ltd. During 20X0, the Pacific Island currency ("Pi") depreciated significantly because of political instability. Excerpts from Aloha Ltd's financial statements at 31 December 20X0 are as follows: Aloha Ltd Financial Statements, year ending 31 December 20X0 Pi Rate $A Total Assets 800,000 Total Liabilities 300,000 Net Assets 500,000 Share capital 400,000 Retained profit 100,000 30,000 Total Shareholders' Equity 500,000 The accountant for Aloha Ltd has translated Aloha's income statement into Australian dollars, and determined that the SA balance of retained profits at 31 December 20X0 is $30,000, as shown in the table above. No dividends were paid or proposed by Aloha Ltd during the year. Exchange rates at various dates during 20X0 are as follows: Pi1.00 = A$0.80 1 January 20X0 30 June 20X0 31 December 20X0 Average rate 20X0 Pi1.00 = A$0.20 Pi1.00 = A$0.50 Required: Translate Aloha Ltd's shareholders' equity at 31 December 20X0 into Australian dollars in accordance with AASB 121. What is the SA balance of the foreign currency translation reserve? What is the total $A balance of shareholders' equity? (3 marks) Provide an independent calculation of the foreign currency translation gain or loss for 20X0. (2 marks) (b)