Translation of financial statements Use the following information for the next three questions: Entity A started its operations on January 1, 20x1. On this date, Entity A's equity consisted of P2M share capital, which were issued also on this date. Entity A's functional currency is the Philippine peso (P). However, it wishes to present its 20x1 financial statements into Chinese yuan (Y). The following information was gathered on December 31, 20x1, after a year of opertion. Total assets PIOM Total liabilities Share capital Retained earnings Total liabilities and equity PSM 2M 3M PIOM Income Expenses Profit P7M (4M) P3M P5:Y1 P8:Y1 P10:Y1 Relevant exchange rates: January 1, 20x1 (historical rate for the share capital) Average rate December 31, 20xl (closing rate) 3. How much is the translated equity? a. 50,000,000 b. 25,000,000 c. 1,000,000 d. 500,000 4. How much is the translated profit or loss? a. 375,000 b. 500,000 c. 24,000,000 d. 25,000,000 5. How much is the foreign exchange differences arising from the translation? a. 275,000 loss b. 275,000 gain c. 1,750,000 gain d. 1,750,000 loss