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42-48

42. An entity has a subsifliary which operates in a country where the exchange rates are volatile asd there are wild scasenal variations ie costs and revenue. Which rates of exelange may best be ased to tranalate the forcign sabsidiary statement of comprehensive income? 45. An eotity, whose fonactianl carrency is the dellar, than a fereien subaidiary. The aelulalitry declared a dividend te the parent of 9 million eures which was recerded ia the partat flasacial atatrmente. The eachage rate at that date was 1.5 ewres =1 dollar. At the dete of recelpt of the dividend, the esehasge rate had moved to 1.6 euros =1 dellar. The exchange difference ariding en the dividend moeld be treated as follews in the fientiol atntemente. A An exchanpe differince of 55.6 million will be takm to the parcat eatity income B No exchange differmoe will arise as it will be clitinatod on consolidation \begin{tabular}{l|l} C & An exehiage difference of 5375,000 will be taken to equity \\ D & An exchange difference of 5375,000 will be taken to the purent entity and the group \end{tabular} statement of comprehensive income Where a foreign eatity fuactioas independrntly from the pareat, the functional curreacy of the foreign eatity will be - A Deternined using the gridance for determinits the functiceal cumency of an entity B The presentation currency \begin{tabular}{|l|l|} \hline C & That of the country of origin \\ \hline D & That of the country of origin \\ \hline \end{tabular} 47. Aa eatiry started tradiag in the USA. Afier several years the entity expaded trading in Eurepe through a subsidiary. The subuldiary is ensentially an extenalon of their own business and the directers of the twe entities are the same. The fuactional curreney of the subsialary is . \begin{tabular}{|l|l|l|l} A & The dollar or the euro \\ \hline \end{tabular} \begin{tabular}{|l|l|l} B & The euro \\ \hline C & The \\ \hline \end{tabular} D Catnot be deternined 48. An entify, whose functional currency in the doller, lat a fornign mubsidiary. The Aubsidiary aold gods to the parest for 42 million eares whes the exchange rate was 2 ewros =1 doflis. The cest of the geods to the mobilliary wa 24 millioe eures. The goeds were uasold at the year end of 31 December 2068 whre the nalbage rate was 1.5 eures = I dallar. What is the valae of the intra srowp prefir which will be eliminated at 31 Decrmber 20es? \begin{tabular}{|l|l|} \hline A & $127 million \\ \hline B & 516 mitlian \\ \hline C & 59 million \\ \hline D & 521 milition \\ \hline \end{tabular}