Tot 14,401250 7,340.00 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 (HKS) 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: Trade 3.594,000 1200 Sad 1,188,000 Total 4,142.000 299.000 560.400 Insomhetement for they wild 1 Dece2012 Comas 4108.812 GA HRS 37422.000 9,504 000 Capital and eV Opergi 4,158 000 200 Rawang 2.922,300 3,157050 20,0000 5.348.000 3.4 Courget 1,435.000 1.11 350 4101612 Casita 23,453 000 5.5 Calca Hut 13.950,000 300 400 23.000 712 6225 2 800 118,300 415 800 Total 3,421 440 1200 Profit bort 10.597,900 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 (iii) 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$ 992 At 31 December 2019 GB 1= HK$ 10 25 Required: If the functional currency of Shine Ltd is HK$, which translation method is applicable to translate Shine's financial statements to GB and why? Showing clearly all your workings: Calculate the goodwill arising from the acquisition of Shine Ltd in GB. Compute SSG's retained earnings and non-controlling interest as at 31 December 2019. Prepare SSG's Consolidated Income Statement for the year ended 31 December 2019. Prepare SSG's Consolidated Balance Sheet for the year ended 31 December 2019. 220 2,673,000 712.00 21540 7854,990 Balance Sheet on 21 December 2013 CHC HK$ Nascua 830.000 5.464.800 Irint 2300 1495.000 Tradero 3.599,700 85 950 Cr 47520 Total 5418,050 2872 Tot 14,401250 7,340.00 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 (HKS) 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: Trade 3.594,000 1200 Sad 1,188,000 Total 4,142.000 299.000 560.400 Insomhetement for they wild 1 Dece2012 Comas 4108.812 GA HRS 37422.000 9,504 000 Capital and eV Opergi 4,158 000 200 Rawang 2.922,300 3,157050 20,0000 5.348.000 3.4 Courget 1,435.000 1.11 350 4101612 Casita 23,453 000 5.5 Calca Hut 13.950,000 300 400 23.000 712 6225 2 800 118,300 415 800 Total 3,421 440 1200 Profit bort 10.597,900 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 (iii) 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$ 992 At 31 December 2019 GB 1= HK$ 10 25 Required: If the functional currency of Shine Ltd is HK$, which translation method is applicable to translate Shine's financial statements to GB and why? Showing clearly all your workings: Calculate the goodwill arising from the acquisition of Shine Ltd in GB. Compute SSG's retained earnings and non-controlling interest as at 31 December 2019. Prepare SSG's Consolidated Income Statement for the year ended 31 December 2019. Prepare SSG's Consolidated Balance Sheet for the year ended 31 December 2019. 220 2,673,000 712.00 21540 7854,990 Balance Sheet on 21 December 2013 CHC HK$ Nascua 830.000 5.464.800 Irint 2300 1495.000 Tradero 3.599,700 85 950 Cr 47520 Total 5418,050 2872