Co Y is an 80%-owned subsidiary of USCo. The functional currency of Co Y is the Singapore dollar. The functional currency of USCo is the US dollar. The financial statements kept in Singapore dollars are shown below.

Required
1. Translate the financial statements to its presentation currency.
2. Calculate the translation gains/losses for goodwill and undervalued inventory.
3. Prepare the consolidation journal entries.

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Sales. Cost of Sales Opening inventory..... Purchases... Less closing inventory. Less Cost of Sales.. Gross profit...... Operating expenses. Interest expense Depreciation Profit before tax... Tax expense.... Profit after tax Dividends declared.. Profit retained.... Retained earnings, 1 Jan 2012. Retained earnings, 31 Dec 2012. Co Y Income Statement For the Year Ended 31 December 2012 320,000 1,500,000 (480,000) SGD 2,000,000 (1,340,000) 660,000 (100,000) (16,000) (80,000) 464,000 (120,000) 344,000 (40,000) 304,000 400,000 704,000 Rate USD | | ||