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On 1 January 2014, Idea Berhad purchased 100 percent of the equity of Moro Limited, a company in Morocco. At the date of acquisition, Moro

On 1 January 2014, Idea Berhad purchased 100 percent of the equity of Moro Limited, a company in Morocco. At the date of acquisition, Moro Ltd has net identifiable assets at fair value of Moroccan Dirham (MD) 1,890,000 of which, retained earnings was MD90,000. The financial statement of the subsidiary is as given:

 

Moro Limited

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2016

 

 

MD’000

Revenue

500

Cost of sales

(200)

Gross profit

300

 

 

Operating expense

 (130)

 

 

Profit before taxation

  170

Taxation

  (100)

Profit after taxation

  70

 

 

Other comprehensive income:

 

Revaluation surplus

 10

Total comprehensive income for the year

80

 Movement in retained earnings:

 

Retained earnings as at 1 January 2016

382

Profit for the year

70

Dividend

(2)

Retained earnings as at 31 December 2016

450

Moro Limited

Statement of Financial Position

As at 31 December 2016

 

 

 

 

 

MD’000

Non-current assets

 

 

 

     2,000

Current assets

 

 

 

810

Total assets

 

 

 

     2,810

 

 

 

 

 

 

 

 

 

MD’000

Equity and Liabilities

 

 

 

 

Equity

 

 

 

 

Share capital of MD1 each

 

 

 

     1,600

Retained earnings

 

 

 

450

Revaluation reserve

 

 

 

 210

 

 

 

 

     2,260

Current liabilities

 

 

 

 

Current liabilities

 

 

 

350

Non-current liabilities

 

 

 

200

Total equity and liabilities

 

 

 

     2,810

 

Additional information:

1. Retained earnings as at 31 December 2014 was MD120,000

2. A revaluation exercise was conducted on 1 September 2016 that brought the value of land up by MD10 million.

3. Moro declared and paid dividend on 1 May 2016.

4. Exchange rates were as follows:

 

Rate

MD1 to RM

1 January 2014

2.00

31 December 2014

1.97

Average from 1 January 2014 to 31 December 2014

2.01

31 December 2015

2.06

Average from 1 January 2015 to 31 December 2015

1.96

1 February 2016

2.10

1 May 2016

2.15

1 September 2016

2.11

31 December 2016

2.20

Average from 1 January 2016 to 31 December 2016

2.05

 

5. All workings may be rounded to the nearest RM0.10 million.

 

REQUIRED:

Prepare the following translated financial statements of Moro Limited in accordance with MFRS 121 The Effects of Changes in Foreign Exchange Rates, that include:

(a) Statement of Profit or Loss and Other Comprehensive Income for the year ended 31December 2016. 

(b) Statement of Financial Position as at 31December 2016.

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