QUESTION ONE: FOREIGN CURRENCY TRANSLATION On 1 July 2021 Lily Limited, a New Zealand company, acquires all the issued shares in Rose Limited, a company incorporated in the United States. Exchange rates for the financial year ending 30 June 2022 are as follows: 1 July 2021 Average rate for the year Ending inventory acquired before year end) 30 June 2022 Exchange rates 1 US$ = 2.30 NZS 1 US$ = 2.40 NZS 1 USS = 2.60 NZS 1 USS = 2.70 NZS I The profit and loss statement and the balance sheet of Rose Limited for the financial year ending 30 June 2022 are shown below. 30 June 2022 are shown below. Rose Limited as at 30 June 2022 Balance sheet Rose Limited as at 30 June 2022 USS Profit and loss statement US$ 5,000 Assets 4,000 1,500 1,000 6,500 Sales Cost of sales Inventory - 1 July 2021 Purchases Inventory - 30 June 2022 Administration expense Depreciation expense Profit (1,000) (4,000) 1,000 (150) (200) 650 (250) Plant and equipment Cash and debtors Inventory Total assets Liabilities Bank loan Trade creditors Total liabilities Net assets Represented by Share capital Retained earnings 4,000 500 4,500 2,000 400 Income tax expense Profit after tax Retained earnings - opening Retained earnings - closing 600 1,000 I T 1,000 1,000 2.000 Required: Translate the financial statements of the foreign operation Rose Limited from the functional currency of the subsidiary into the presentation currency of the group