please solve the questions using the closing rate method of Translation (current rate method), also write the reasons for choosing this method (for part a). And I want the questions to be solved in detail, and I prefer the solution to be typed by keyboard.

Question 4 On 1 January 2015, Star Ltd acquired 75% of the ordinary shares of Shine Ltd in Hong Kong to form Star-Shine Group (SSG). At that date the balance on the retained earnings of Shine Ltd was Hong Kong Dollars (HK$) 1,700,000. The non-controlling interest in Shine was measured as the proportionate share of the net assets of the subsidiary. No shares have been issued by Shine since acquisition. The summarised income statements and balance sheets of Star Ltd and Shine Ltd as at 31 December 2019 were as follows: Income Statement for the year ended 31 December 2019 Star Shine GBE HK$ Sales 37,422,000 9,504,000 Opening inventories 4,158,000 1,259,280 Purchases 20,790,000 5,346,000 Closing inventories 1,485,000 1,021,680 Cost of sales 23,463,000 5,583,600 Gross profit 13,959,000 3,920,400 Depreciation Other expenses Interest paid Total expenses 2,376,000 629,640 415,800 3,421,440 712,800 237,600 118,800 1,069,200 Profit before tax Taxation Profit after tax 10,537,560 2,673,000 7,864,560 2,851,200 712,800 2,138,400 Balance Sheet as on 31 December 2019 Star Shine GBE HK$ Non-current assets 8,316,000 5,464,800 Investment in Shine Ltd 267300 Current assets: Inventories 1,485,000 1.021,680 Trade receivables 3,593,700 1,306,800 Shine Ltd 85,950 Cash 653,400 47.520 Total current assets 5,818,050 2,376,000 Total Assets 14,401,350 7.840,800 Current liabilities: Trade payables 3,564,000 1,069,200 Star Ltd 880,988 Taxation 1,188,000 831,600 Total current liabilities 4,752,000 2,781,788 Debentures 2.970,000 950,400 Total assets less liabilities 6,679,350 4,108,612 3,757.050 3,748,862 Capital and reserves Share capital 2,922,300 359,750 Retained earnings 6,679,350 4,108,612 The following further information is available: An amount of HK$ 200,000 was written off goodwill as an impairment charge in the current year and HK$ 140,000 in the previous year. On 23 March 2019, Star Ltd sold goods 2,250,000 to Shine Ltd, making a profit of 20% on cost. At the year end, one third of these raw materials were still in the inventory of Shine Ltd, and the inter-company transactions have not been eliminated from the financial statements. The goods were recorded by Shine at the exchange rate ruling on 23 March 2019. Exchange rates were as follows: At 1 January 2015 GB 1= HK$ 15.52 Average for the year ending 31 December 2019 GB 1= HK$ 10.05 At 31 December 2018/ 1 January 2019 GB 1= HK$ 9.92 At 31 December 2019 GB 1 = HK$ 10.25 Required: (a) If the functional currency of Shine Ltd is HK$, which translation method is applicable to translate Shine's financial statements to GB and why? (b) Showing clearly all your workings: (1) Calculate the goodwill arising from the acquisition of Shine Ltd in GB. (ii) Compute SSG's retained earnings and non- controlling interest as at 31 December 2019. (ii) Prepare SSG's Consolidated Income Statement for the year ended 31 December 2019. (iv) Prepare SSG's Consolidated Balance Sheet for the year ended 31 December 2019. (20 marks) Queston 4 an 1 January 2015, Star Lld acquired 75% of the ordinary shares of Shine Lid in Hong Kong to form StarShine Group (SSG) At that date the balance on the retained earnings of Shine Lid was Hong Kong Dollar (HK$) 1.700,000. The non controlling interest in Shine was measured as the proportionate share of the net assets of the subsidiary No shares have been issued by Shine since acquisition The summarised income statements and balance sheets of Star Lld and Shined as at 31 December 2019 were as Robows Income Statement for the year ended 31 December 2013 Star Shine GBE HKS Sales 37.422.000 9,504.000 Opening inventones 4.158.000 1,259,280 Purchases 20,790,000 5.305.000 Closing inventories 1,485.000 1021 680 Cost of sales 23,463.000 5.583 500 Gross prom 13 959 000 Depreciation Other expenses Interest paid Total expenses 2,376,000 629,640 415 800 3.421,440 3.920,400 712,30 237.500 118.800 1,069 200 Profit before tax Taxation Profit after tax 10.537 560 2673 000 7,864 560 2.851200 712.800 2138 400 Shine HKS 5,464,800 Balance Sheet as on 31 December 2019 Star GBE Non-current assets 8.316.000 investment in Shine Lid 257300 Current assets Inventories 1485.000 Trade receivabes 3,593,700 Shine Led 85 950 553.400 Total current assets 5 818 050 Total Assets 14 401350 1 021.680 1.305 800 47.520 7840.600 3.564,000 Currentes Trade payables Star LM Tacation Total current as Debentures Total assets less kabites 1.188 000 4.752.000 2.970 000 1.099 200 880,988 831 600 2,781.786 950 400 4.104512 Capital and reserves Share capital Retained earnings 2.902,300 3.757050 6,679 350 309,750 3.743862 4108 612 The following further information is available 0 An amount of HK$ 200,000 was written off goodwill as an impament charge in the current year and HKS 140.000 in the previous year (1) On 23 March 2019, Star Lid sold goods 2.250.000 to Shine ud, making a profit of 20% on cost. Al the year end, one third of these raw materials were still in the inventory of Shine Lid, and the inter company transactions have not been eliminated from the financial statements. The goods were recorded by Shine at the exchange rate ruling on 23 March 2019 Exchange rates were as follows Al 1 January 2015 GBE HKS 15 52 Average for the year ending 31 December 2019 GBL 1 HK$ 10.06 Al 31 December 2018/1 January 2019 GBE 1 HK$ 992 AI 31 December 2019 GBE 1 HKS 10 25 ( Required: If the functional currency of Shine Ltd is HKS, which translation method is applicable to translate Shine's financial statements to GBE and why? (D) Showing clearly all your workings: Calculate the goodwill arising from the acquisition of Shine Ltd in GBE 19 Compute SSG's retained earnings and non-controlling interest as at 31 December 2019 (I) Prepare SSG's Consolidated Income Statement for the year ended 31 December 2019 (iv) Prepare SSG's Consolidated Balance Sheet for the year ended 31 December 2019 120 marks) Question 4 On 1 January 2015, Star Ltd acquired 75% of the ordinary shares of Shine Ltd in Hong Kong to form Star-Shine Group (SSG). At that date the balance on the retained earnings of Shine Ltd was Hong Kong Dollars (HK$) 1,700,000. The non-controlling interest in Shine was measured as the proportionate share of the net assets of the subsidiary. No shares have been issued by Shine since acquisition. The summarised income statements and balance sheets of Star Ltd and Shine Ltd as at 31 December 2019 were as follows: Income Statement for the year ended 31 December 2019 Star Shine GBE HK$ Sales 37,422,000 9,504,000 Opening inventories 4,158,000 1,259,280 Purchases 20,790,000 5,346,000 Closing inventories 1,485,000 1,021,680 Cost of sales 23,463,000 5,583,600 Gross profit 13,959,000 3,920,400 Depreciation Other expenses Interest paid Total expenses 2,376,000 629,640 415,800 3,421,440 712,800 237,600 118,800 1,069,200 Profit before tax Taxation Profit after tax 10,537,560 2,673,000 7,864,560 2,851,200 712,800 2,138,400 Balance Sheet as on 31 December 2019 Star Shine GBE HK$ Non-current assets 8,316,000 5,464,800 Investment in Shine Ltd 267300 Current assets: Inventories 1,485,000 1.021,680 Trade receivables 3,593,700 1,306,800 Shine Ltd 85,950 Cash 653,400 47.520 Total current assets 5,818,050 2,376,000 Total Assets 14,401,350 7.840,800 Current liabilities: Trade payables 3,564,000 1,069,200 Star Ltd 880,988 Taxation 1,188,000 831,600 Total current liabilities 4,752,000 2,781,788 Debentures 2.970,000 950,400 Total assets less liabilities 6,679,350 4,108,612 3,757.050 3,748,862 Capital and reserves Share capital 2,922,300 359,750 Retained earnings 6,679,350 4,108,612 The following further information is available: An amount of HK$ 200,000 was written off goodwill as an impairment charge in the current year and HK$ 140,000 in the previous year. On 23 March 2019, Star Ltd sold goods 2,250,000 to Shine Ltd, making a profit of 20% on cost. At the year end, one third of these raw materials were still in the inventory of Shine Ltd, and the inter-company transactions have not been eliminated from the financial statements. The goods were recorded by Shine at the exchange rate ruling on 23 March 2019. Exchange rates were as follows: At 1 January 2015 GB 1= HK$ 15.52 Average for the year ending 31 December 2019 GB 1= HK$ 10.05 At 31 December 2018/ 1 January 2019 GB 1= HK$ 9.92 At 31 December 2019 GB 1 = HK$ 10.25 Required: (a) If the functional currency of Shine Ltd is HK$, which translation method is applicable to translate Shine's financial statements to GB and why? (b) Showing clearly all your workings: (1) Calculate the goodwill arising from the acquisition of Shine Ltd in GB. (ii) Compute SSG's retained earnings and non- controlling interest as at 31 December 2019. (ii) Prepare SSG's Consolidated Income Statement for the year ended 31 December 2019. (iv) Prepare SSG's Consolidated Balance Sheet for the year ended 31 December 2019. (20 marks) Queston 4 an 1 January 2015, Star Lld acquired 75% of the ordinary shares of Shine Lid in Hong Kong to form StarShine Group (SSG) At that date the balance on the retained earnings of Shine Lid was Hong Kong Dollar (HK$) 1.700,000. The non controlling interest in Shine was measured as the proportionate share of the net assets of the subsidiary No shares have been issued by Shine since acquisition The summarised income statements and balance sheets of Star Lld and Shined as at 31 December 2019 were as Robows Income Statement for the year ended 31 December 2013 Star Shine GBE HKS Sales 37.422.000 9,504.000 Opening inventones 4.158.000 1,259,280 Purchases 20,790,000 5.305.000 Closing inventories 1,485.000 1021 680 Cost of sales 23,463.000 5.583 500 Gross prom 13 959 000 Depreciation Other expenses Interest paid Total expenses 2,376,000 629,640 415 800 3.421,440 3.920,400 712,30 237.500 118.800 1,069 200 Profit before tax Taxation Profit after tax 10.537 560 2673 000 7,864 560 2.851200 712.800 2138 400 Shine HKS 5,464,800 Balance Sheet as on 31 December 2019 Star GBE Non-current assets 8.316.000 investment in Shine Lid 257300 Current assets Inventories 1485.000 Trade receivabes 3,593,700 Shine Led 85 950 553.400 Total current assets 5 818 050 Total Assets 14 401350 1 021.680 1.305 800 47.520 7840.600 3.564,000 Currentes Trade payables Star LM Tacation Total current as Debentures Total assets less kabites 1.188 000 4.752.000 2.970 000 1.099 200 880,988 831 600 2,781.786 950 400 4.104512 Capital and reserves Share capital Retained earnings 2.902,300 3.757050 6,679 350 309,750 3.743862 4108 612 The following further information is available 0 An amount of HK$ 200,000 was written off goodwill as an impament charge in the current year and HKS 140.000 in the previous year (1) On 23 March 2019, Star Lid sold goods 2.250.000 to Shine ud, making a profit of 20% on cost. Al the year end, one third of these raw materials were still in the inventory of Shine Lid, and the inter company transactions have not been eliminated from the financial statements. The goods were recorded by Shine at the exchange rate ruling on 23 March 2019 Exchange rates were as follows Al 1 January 2015 GBE HKS 15 52 Average for the year ending 31 December 2019 GBL 1 HK$ 10.06 Al 31 December 2018/1 January 2019 GBE 1 HK$ 992 AI 31 December 2019 GBE 1 HKS 10 25 ( Required: If the functional currency of Shine Ltd is HKS, which translation method is applicable to translate Shine's financial statements to GBE and why? (D) Showing clearly all your workings: Calculate the goodwill arising from the acquisition of Shine Ltd in GBE 19 Compute SSG's retained earnings and non-controlling interest as at 31 December 2019 (I) Prepare SSG's Consolidated Income Statement for the year ended 31 December 2019 (iv) Prepare SSG's Consolidated Balance Sheet for the year ended 31 December 2019 120 marks)