Bazza Ltd, an Australian company, acquires all of the shares of Chan Ltd, a Hong Kong company, on 1 July 2022. Chan Ltd had a $nil balance in retained earnings as at the date of acquisition. The financial statements for Chan Ltd are presented below:

Additional Information

• Plant, equipment and inventory are acquired on 1 July 2022. There were no monetary assets or liabilities at the commencement of business.
  Long-term bonds are issued on 1 August 2022, with the principal to be repaid in full in five years. The bonds are issued in exchange for land, which is to be developed as a factory site.
• Inventory on hand at the end of the financial year has been manufactured throughout the June 2023 quarter.
• All revenue and expense items are incurred evenly throughout the year.

REQUIRED

Translate the financial statements of Chan Ltd into Australian dollars in preparation for group consolidation in accordance with AASB 121, assuming that HK dollars are the functional currency of Chan Ltd and the Australian dollar is the presentation currency of the group

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Chan Ltd Statement of profit or loss and other comprehensive income for the year ending 30 June 2023 HK$ Sales Cost of sales - Inventory-1 July 2022 - Cost of goods manufactured - Inventory-30 June 2023 Gross profit Selling and administrative expenses Depreciation Profit before tax Income tax expense (20 per cent) Profit after tax Other comprehensive income Total comprehensive income (25 000) (152 500) 27 500 HK$ 250 000 (150 000) 100 000 (20 000) (30 000) 50 000 (10 000) 40 000 40 000