Question

Question 7 Banjo Ltd acquired 100% of Wellington Ltd on 1 July 2018. The balance sheet of Wellington Ltd on that date was as follows: Balance sheet at 1 July 2018 NZ$ NZ$ Machinery at cost 560,000 Share capital 400,000 Investment property 400,000 General reserve 200,000 Receivables 100,000 Retained earnings 600,000 Cash 140,000 1,200,000 1,200,000 The balance sheet of Wellington Ltd as at 30 June 2019 is as follows: Balance sheet as at 30 June 2019 NZ$ NZ$ Machinery — carrying value 300,000 Share capital 400,000 Investment property 400,000 General Reserve 200,000 Receivables 500,000 Retained earnings 1,000,000 Cash 600,000 Accounts payable 170,000 Income tax payable 30,000 1,800,000 1,800,000 Relevant exchange rates are as follows: NZ$ A$ 1 July 2018 1.00 = 0.95 30 June 2019 1.00 = 0.85 Average 2018-19 1.00 = 0.90 If the functional currency of Wellington Ltd is New Zealand dollars and the presentation currency is Australian dollars the total assets of NZ$1,800 000 would translate into Australian dollars as: $1,620,000 $1,530,000 $1,560,000 $1,710,000

Answer 1

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