5. Answer all parts of this question (a) Stripe Ltd buys a new machine on 1 June 2021 from Spot International for 900,000 'legs', the currency in which Spot International trades, on credit. This is still outstanding at the year end, 31 December 2021. Stripe Ltd also raised a five year loan of 3,000,000 "pegs" on 1 January 2021. The exchange rate at the date of purchase of the machine was 8 legs to 1 and the exchange rate at year end is 10 legs to 1. The exchange rate for pegs was 5 pegs to 1 on 1 January 2021 and 2 pegs to 1 on 31 December 2021. Required: (i) Show how the purchase of the machine and any subsequent exchange gain or loss would be accounted for on 1 June 2021 and on 31 December 2021. The reporting currency of Stripe Ltd is s. (ii) Show how the loan and any subsequent exchange gain or loss would be accounted for on 1 January 2021 and on 31 December 2021. (6 marks) (b) Moose Ltd and Elk Ltd are identical companies who acquire purchased goodwill of the same amount. Moose Ltd capitalizes the purchased goodwill. No impairment arises on the goodwill. Elk Ltd chooses to capitalize and amortise the purchased goodwill over 5 years. Required Define internal goodwill and purchased goodwill. Identify the accounting treatment for internal goodwill and purchased goodwill in accordance with IFRS 3 and IAS 38. What is the difference in the net profit ratio and the current ratio between Moose Ltd and Elk Ltd in the first year of acquiring purchased goodwill, giving reasons for your answers? Your answer to this question should not be more than 210 words. (7 marks) (c) Jig Ltd has a September year end and is preparing its financial statements for the year ending 30 September 2021. On 15 September 2021, Jig Ltd was notified that a major customer who owed Jig Ltd a considerable amount of money was in financial trouble and was in negotiations with a major bank to try and secure a loan. In December 2021, Jig Ltd was informed that the major customer had been unsuccessful in securing a loan and was no longer able to continue to trade. It was extremely unlikely that Jig Ltd would be paid. In January 2022, Jig's storage facility for its products was flooded, causing material damage to Jig Ltd's inventory. Required What are post balance sheet events and how are they accounted for? How would the events in December 2021 and January 2022 be treated in the financial statements of Jig Ltd for 2021? Give reasons for your answers. (7 marks) Total 20 marks