Use the following information for the next three questions: Entity A has just started its operations on January 1, 20x1. On this date, Entity As equity consisted of 2M share capital, which were issued also on this date. Entity As functional currency is the Philippine peso (). However, it wishes to present its 20x1 financial statements into Japanese yen (). The following information was gathered on December 31, 20x1, after a year of operations. Total assets 10M Total liabilities 5M Share capital 2M Retained earnings 3M Total liabilities and equity 10M Income 7M Expenses (4M) Profit 3M Relevant exchange rates: January 1, 20x1 (historical rate for the share capital) 1: 2 Average rate 1: 3 December 31, 20x1 (closing rate) 1: 4

1. How much is the translated total assets? a. 40M b. 36M c. 20M d. 18M

2. How much is the translated total equity? a. 40M b. 36M c. 20M d. 18M 3. How much is the translated profit or loss? a. 9M b. 7M c. 6M d. 12M