Identifying the exchange rate  LO3 The accounts listed below are those for Peak Ltd, a foreign subsidiary in Hong Kong, that maintains its accounting records in Hong Kong dollars (HK$). The parent is an Australian company, Merino Ltd. In the spaces provided indicate the exchange rates that would be applied in translating the accounts shown in the financial statements of the Hong Kong subsidiary into Australian dollars (A$) assuming:

(a) the functional currency is the A$

(b) the functional currency is the HK$. Use the following letters to identify the appropriate exchange rate: H — historical exchange rate C — current exchange rate A — average exchange rate for the current period. Exchange rate if the functional currency is: Account A$ HK$ Cash Prepaid expenses Inventories at cost Inventories at net realisable value Plant at cost Accumulated depreciation — plant Goodwill Accounts payable Debentures Capital Sales Wages expense Depreciation expense