JANUARY 2019. QUESTION 2 Martins Ine., a Russian company carries out is day-to-day operations in Russian rubles (RUB) and acts independently of Hople. On January 2011, House ple purchased 11,250,000 x in Martins Inc. when the refined canings of Martine Inc. were RUBS.000.000. The fair value of the rest assets of Martins Inc. on 1 January 2011 was the same as their book value The draft statements of profit or loss and other compechensive income for the year ended 31 December 2018 of House ple and Martins Ine, together with their dran statements of financial positions at that date, are shown below Draft Statements of Financial Position as at 31 December 2018 House ple Martins Inc. 1000 RUR'000 RUB000 ASSETS Nom-www. Property, plant and equipment 30,000 25.000 Investments 7.500 37.500 25,000 Chrest Inventory 12.500 20.000 Trade receivables 14.000 17.500 Dividends receivable 3.000 Cash at bank 500 30.000 37.500 67.500 62.500 EQUITY AND LIABILITIES Capvial and Revers Called up share capital (EI/RUBI shares) Retained earnings 17,500 20,000 37.500 10,000 15.000 12.500 27,500 12,500 Now-cwrew Liabilities Current Liabilities Trade payables Dividends payable Bank loan 7,500 5.000 7,500 10.000 6,000 6.500 20.000 67.500 22.500 62.500 Prisc Draft Statements of Profit and Loss or Other Comprehensive Income for the Year Ended 31 December 2018 House ple Martins Ine. '000 RUB'000 Revenue Cost of sales Gross profit Distribution costs Administrative expenses Operating profit Dividend receivable Interest payable Profit before tax Taxation Profit after tax 80,000 (42.500) 37,500 (12,500) (10,000) 15.000 3,000 (2.000) 16,000 (5,000) 11.000 62,500 (32,500) 30,000 (10,000) (6,000) 14,000 (1.500) 12,500 (4.000) 8.500 Additional Information 1. Exchange rates at the relevant dates are as follows: Date 1 January 2011 31 December 2017 31 December 2018 Average rate 2018 RUB to the 2 1.6 1.5 1.52 2. Amounts shown as non-current liabilities by House plc and Martins Inc. represent the long- term element of the bank loan shown in current liabilities. These loans were raised by each of the companies independently and are repayable by each of the companies in their local currency. 3. The dividends payable included in the draft statements of financial position of House plc and Martins Inc. shown above had not been approved by the shareholders at 31 December 2018. No other dividends were paid or proposed by either company during 2018. Cequirement repare the consolidated statement of profit or loss and other comprehensive income of House c for the year ended 31 December 2018 and the consolidated statement of financial position at that date, showing the foreign exchange translation reserve separately within equity. Total 25 Marks JANUARY 2019. QUESTION 2 Martins Ine., a Russian company carries out is day-to-day operations in Russian rubles (RUB) and acts independently of Hople. On January 2011, House ple purchased 11,250,000 x in Martins Inc. when the refined canings of Martine Inc. were RUBS.000.000. The fair value of the rest assets of Martins Inc. on 1 January 2011 was the same as their book value The draft statements of profit or loss and other compechensive income for the year ended 31 December 2018 of House ple and Martins Ine, together with their dran statements of financial positions at that date, are shown below Draft Statements of Financial Position as at 31 December 2018 House ple Martins Inc. 1000 RUR'000 RUB000 ASSETS Nom-www. Property, plant and equipment 30,000 25.000 Investments 7.500 37.500 25,000 Chrest Inventory 12.500 20.000 Trade receivables 14.000 17.500 Dividends receivable 3.000 Cash at bank 500 30.000 37.500 67.500 62.500 EQUITY AND LIABILITIES Capvial and Revers Called up share capital (EI/RUBI shares) Retained earnings 17,500 20,000 37.500 10,000 15.000 12.500 27,500 12,500 Now-cwrew Liabilities Current Liabilities Trade payables Dividends payable Bank loan 7,500 5.000 7,500 10.000 6,000 6.500 20.000 67.500 22.500 62.500 Prisc Draft Statements of Profit and Loss or Other Comprehensive Income for the Year Ended 31 December 2018 House ple Martins Ine. '000 RUB'000 Revenue Cost of sales Gross profit Distribution costs Administrative expenses Operating profit Dividend receivable Interest payable Profit before tax Taxation Profit after tax 80,000 (42.500) 37,500 (12,500) (10,000) 15.000 3,000 (2.000) 16,000 (5,000) 11.000 62,500 (32,500) 30,000 (10,000) (6,000) 14,000 (1.500) 12,500 (4.000) 8.500 Additional Information 1. Exchange rates at the relevant dates are as follows: Date 1 January 2011 31 December 2017 31 December 2018 Average rate 2018 RUB to the 2 1.6 1.5 1.52 2. Amounts shown as non-current liabilities by House plc and Martins Inc. represent the long- term element of the bank loan shown in current liabilities. These loans were raised by each of the companies independently and are repayable by each of the companies in their local currency. 3. The dividends payable included in the draft statements of financial position of House plc and Martins Inc. shown above had not been approved by the shareholders at 31 December 2018. No other dividends were paid or proposed by either company during 2018. Cequirement repare the consolidated statement of profit or loss and other comprehensive income of House c for the year ended 31 December 2018 and the consolidated statement of financial position at that date, showing the foreign exchange translation reserve separately within equity. Total 25 Marks