Emu Co Ltd purchased a foreign operation based in Singapore on 1 July 2002. The following information was extracted from the foreign operation's accounts for the period ended 30 June 2004:

Exchange rate information is:

What is the amount at which each item will be translated (rounded to the nearest $A)?
E) None of the given answers.

Question

Emu Co Ltd purchased a foreign operation based in Singapore on 1 July 2002. The following information was extracted from the foreign operation's accounts for the period ended 30 June 2004:

Exchange rate information is:

What is the amount at which each item will be translated (rounded to the nearest $A)?
E) None of the given answers.

Quizplus · Accepted Answer

Each item should be translated at the exchange rate on the date of the transaction, except for the non-monetary assets which should be translated at their historical cost (which is the purchase price in this case). Using these rules, Option B provides the correct translations for all items.

Emu Co Ltd Purchased a Foreign Operation Based in Singapore