Q1. The Big Group has established a new subsidiary, Rotto Ltd, in Bogoland where the unit of currency is the Bogo. The new company was set up in 31 December 20X3 when its balance sheet was as follows: The company's Profit and Loss Account for the year ended 31 December 20X4 and its balance sheet at that date, both in Bogos are as follows: The following information is relevant: (1) 31 December 20041=8 Bogos when Fixed Asset was purchased 1=9 Bogos Average for the year 1=9 Bogos when Closing Stock was purchased 1=8 Bogos (2) Depreciation policy is 10% straight line method. There were no fixed asset disposals during the year. A full year of depreciation is provided in the year of addition. REQUIRED: a) Translate the financial statements of Rotto Ltd to 's sterling for the year ended 31 December 20X4 using (1) Temporal method and (2) the closing rate method. b) In (2) closing rate method, analyse the difference arising on exchange, and identify the treatment of exchange difference under IAS 21 when the closing rate method is used