Question Five (10 marks) A Lebanese Company has a branch in Egypt. The branch's financial statements in 31/12/2020 (Egyptian pound LE) were as follows: Income statement Revenues 300,000 Cost of goods sold (150,000) Other expenses (including depreciation 30,000) (50,000) Net income 100,000 Statement of Financial Position Cash 150,000 Inventory (cost) 50,000 Plant Assets 300,000 500,000 AP 30,000 Long-term loan 170,000 Capital 100,000 Retained earnings 200,000 500,000 Additional information: 1. The Branch acquired the plant assets in January 1, 2009 when the company was established. 2. On January 1, 2010, the company increased capital by LE 50,000 and purchased plant assets of LE 100,000. Plant assets have no salvage value and have the same useful life and the company uses the straight-line depreciation. 3. The branch declared and paid dividends of LE 75,000 at December 1, 2020. 4. Beginning inventory of January 1, 2020 was acquired during October-December 2019. 5. The ending inventory was acquired on December 1, 2020. 6. Cost of goods sold balance at December 31, 2020 of the branch in Lebanese lira was LL 207,000. 7. The January 1, 2020 retained earnings balance of the branch in Lebanese lira was LL 350,000. 8. The functional currency is the Lebanese lira (LL). 9. The exchange rate for Egyptian pound against the Lebanese are: Date Rate Date Rate January 1, 2009 1.32 Average for 2020 1.50 January 1, 2010 1.36 December 1, 2020 1.62 October-December 2019 1.34 December 31, 2020 1.65 January 1, 2019 1.30