Foreign Exchange Currency Financial accounting

6. AFAII 201213 S2 Exam The following shows the equity section of the Balance Sheet of KL Ltd, incorporated in Malaysia, which is a subsidiary company of Local Ltd: This subsidiary was acquired in 1 January 2010. The following shows the exchange rates of Singapore Dollar (SGD) to Malaysian Ringgit (MYR): Assume that the profit after tax of Malaysia Ltd for 2010 and 2011 was $700,000 and $500,000 respectively. Another revaluation was done on the assets of KI Ltd on 31/12/2011. The net assets of KL Ltd (which functions in a non-inflationary economy) translated based on the Closing Rate method amounted to SGD 5,000,000 as at 31/12/2012. Required: Copy and fill up the table below, to translate the equity balances, using the Closing Rate method (Show your workings clearly). Calculate the value of the Foreign Currency Translation Reserve for Local Ltd as at 31 December 2012 . 5. AFAII 201314 S1 Exam a) Joint Pte Ltd acquired Combine Inc. ("Combine"), a company incorporated in USA, on 1 January 2011. Combine is a subsidiary company of Joint Pte Ltd. Below is the equity section of the Statement of Financial Position of Combine. The profit after tax for 2012 and 2011 is $440,000 and $340,000 respectively. Combine carried out revaluation of their fixed assets on 1 April 2011 and 3 June 2012 . On 15 August 2012, Combine paid $200,000 dividends to its shareholders. Combine operates in a non-hyperinflationary economy. The following show the exchange rates of 1 US Dollars (US\$) to Singapore Dollar (S\$): Required: i) Calculate Combine's translated net assets balance in SS as at 31 December 2012 to be included in Joint's consolidated financial statements using the Closing Rate Method. (2 marks) ii) Copy and fill up the table below, to translate the equity balances, using the Closing Rate method. Also, calculate the value of the foreign currency translation reserve as at 31 December 2012 . (11 marks) 4 AFAII CAl 201314 S1 Q1 a) For each of the following item, state whether it is a monetary or non-monetary item. Give specific reason(s) to explain. i) Fixed assets ii) Unearned income b) Magnificent Pte Ltd ("Magnificent") is a company, incorporated in Singapore, involved in buying and selling furniture in the region. The company uses a periodic inventory system. In 2012, Magnificent entered into the following transactions: - On 1 July 2012, Magnificent sold 10 tables to a European company at S\$1,000 per table. The transaction was billed in Euros. On 31 December, the amount was outstanding. - On 1 August 2012, Magnificent bought 20 chairs from a Japanese company at JPY 6,000 per chair. The transaction was billed in JPY. On 31 October 2012, 40% of the bill was settled while the remaining amount was outstanding as at 31 December 2012. - On 1 November 2012, Magnificent sold 10 chairs to a Malaysia company at S$150 per chair. The transaction was billed in SGD. The amount was settled on 31 December 2012 . Magnificent has a 31 December year end, and uses Singapore dollar as its functional currency. Prepare all necessary journal entries for Magnificent Pte Ltd with regards to the above transactions. (Note: Narrations are not required, round your answer to the nearest dollar). 6. AFAII 201213 S2 Exam The following shows the equity section of the Balance Sheet of KL Ltd, incorporated in Malaysia, which is a subsidiary company of Local Ltd: This subsidiary was acquired in 1 January 2010. The following shows the exchange rates of Singapore Dollar (SGD) to Malaysian Ringgit (MYR): Assume that the profit after tax of Malaysia Ltd for 2010 and 2011 was $700,000 and $500,000 respectively. Another revaluation was done on the assets of KI Ltd on 31/12/2011. The net assets of KL Ltd (which functions in a non-inflationary economy) translated based on the Closing Rate method amounted to SGD 5,000,000 as at 31/12/2012. Required: Copy and fill up the table below, to translate the equity balances, using the Closing Rate method (Show your workings clearly). Calculate the value of the Foreign Currency Translation Reserve for Local Ltd as at 31 December 2012 . 5. AFAII 201314 S1 Exam a) Joint Pte Ltd acquired Combine Inc. ("Combine"), a company incorporated in USA, on 1 January 2011. Combine is a subsidiary company of Joint Pte Ltd. Below is the equity section of the Statement of Financial Position of Combine. The profit after tax for 2012 and 2011 is $440,000 and $340,000 respectively. Combine carried out revaluation of their fixed assets on 1 April 2011 and 3 June 2012 . On 15 August 2012, Combine paid $200,000 dividends to its shareholders. Combine operates in a non-hyperinflationary economy. The following show the exchange rates of 1 US Dollars (US\$) to Singapore Dollar (S\$): Required: i) Calculate Combine's translated net assets balance in SS as at 31 December 2012 to be included in Joint's consolidated financial statements using the Closing Rate Method. (2 marks) ii) Copy and fill up the table below, to translate the equity balances, using the Closing Rate method. Also, calculate the value of the foreign currency translation reserve as at 31 December 2012 . (11 marks) 4 AFAII CAl 201314 S1 Q1 a) For each of the following item, state whether it is a monetary or non-monetary item. Give specific reason(s) to explain. i) Fixed assets ii) Unearned income b) Magnificent Pte Ltd ("Magnificent") is a company, incorporated in Singapore, involved in buying and selling furniture in the region. The company uses a periodic inventory system. In 2012, Magnificent entered into the following transactions: - On 1 July 2012, Magnificent sold 10 tables to a European company at S\$1,000 per table. The transaction was billed in Euros. On 31 December, the amount was outstanding. - On 1 August 2012, Magnificent bought 20 chairs from a Japanese company at JPY 6,000 per chair. The transaction was billed in JPY. On 31 October 2012, 40% of the bill was settled while the remaining amount was outstanding as at 31 December 2012. - On 1 November 2012, Magnificent sold 10 chairs to a Malaysia company at S$150 per chair. The transaction was billed in SGD. The amount was settled on 31 December 2012 . Magnificent has a 31 December year end, and uses Singapore dollar as its functional currency. Prepare all necessary journal entries for Magnificent Pte Ltd with regards to the above transactions. (Note: Narrations are not required, round your answer to the nearest dollar)