Home Ltd is incorporated in the UK and rents mobile homes to holidaymakers in this country and in Carea. The company has a head office in London and a branch in Carea where the local currency is ‘Mics’. The following balances are extracted from the books of the head office and its ‘self-accounting’ branch at 31 December 20X4.

The following information is provided regarding exchange rates, some of which is relevant. The fixed assets of the branch were acquired when there were 8 Mics to the £. Exchange rates ruling during 20X4 were:

There are no cash or goods in transit between head office and branch at the year end.

Required:

The final accounts of Home Ltd for 20X4. The accounts should be expressed in £s sterling and, for this purpose, the conversion of Mics should be made in accordance with the temporal method of translation as specified in SSAP 20: Foreign currency translation.

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Debit balances Fixed assets at cost Debtors and cash Operating costs Branch current account Credit balances Share capital Retained profit, 1 January 20X4 Sales revenue Creditors Head office current account Accumulated depreciation Head Office £ 450,000 17,600 103,700 42,600 613,900 200,000 110,800 186,300 9,700 107,100 613,900 Branch Mics 900,000 36,000 225,000 1,161,000 480,000 25,000 420,000 236,000 1,161,000