Question
Blue Ltd, an Australian company, incorporated a foreign subsidiary Grey Ltd on 1 July 20X1 with capital contribution of FC $100,000. FC is a foreign
Blue Ltd, an Australian company, incorporated a foreign subsidiary Grey Ltd on 1 July 20X1 with capital contribution of FC $100,000. FC is a foreign currency used as the functional currency of Grey Ltd. The presentation currency of the Blue Group is AUD. The trial balance of Grey Ltd in FC at 30 June 20X2 is as follows:
Grey Ltd Trial balance at 30 June 20X2 | |||
FC | FC | ||
DR. | CR. | ||
Total assets | 400,000 | ||
Total liabilities | 200,000 | ||
Issued capital | 100,000 | ||
Sales | 160,000 | ||
Cost of sales | 20,000 | ||
Cash expenses | 30,000 | ||
Depreciation | 10,000 |
| |
460,000 | 460,000 |
Included in the total assets is a building purchased on 1 July 20X1 with FC$800,000.
Payment of the cash expense was made on 1 October 20X1.
Sale, purchase and other expenses were incurred evenly throughout the year.
No dividends were paid or declared by Grey Ltd during the year.
Ignore income tax
Exchange rates at various dates during 20X2 are as follows:
1-Jul-20X1 | FC 1.00 = AUD $2.00 |
1-Oct-20X1 | FC 1.00 = AUD $2.10 |
30-Jun-20X2 | FC 1.00 = AUD $2.30 |
Average rate of FY20X2 | FC 1.00 = AUD $2.20 |
Required:
Calculate the translated ending balance in AUD for the Foreign Currency Translation Reserve account in the translated statement of financial position for Grey Ltd as at 30 June 20X2
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