110.

309 Exam Marking Guide – 2022

SECTION A: FOREIGN CURRENCY

Question 1
1. NZ dollar is the Functional 2. The Singaporean dollar is
Local Currency
Currency the Functional Currency
Exch Exch
Income statement for 2021 $S $NZ $NZ
rate rate
Sales revenue 7,000,000 1.15 8,050,000 0.5 1.15 8,050,000 0.5
Opening Inventory 1,000,000 1.10 1100000 1.10 1100000
Purchases 4,000,000 1.15 4600000 1.15 4600000
Ending inventory -500,000 1.18 -590000 1.18 -590000
Cost of Goods Sold 4,500,000 5,110,000 1 5,110,000 1
Gross Profit 2,500,000 2,940,000 2,940,000
Depreciation- equipment -150,000 1.10 (165,000) 0.5 1.15 (172,500) 0.5
Depreciation- building -55,000 1.16 (63,800) 0.5 1.15 (63,250) 0.5
Other expenses -400,000 1.15 (460,000) 0.5 1.15 (460,000) 0.5
Tax -1,000,000 1.15 (1,150,000) 1.15 1,150,000)
-/+ foreign exchange gain/loss
75,600
(if applicable) 1
Net Profit 895,000 1,176,800 1,094,250
Retained Earnings 1/1/21 3,000,000 1.10 3,300,000 0.5 1.10 3,300,000 0.5
Dividends -500,000 1.14 (570,000) 0.5 1.14 (570,000) 0.5
Retained Earnings 31/12/21 3,395,000 3,906,800 3,824,250

Balance Sheet as at 31 December 2021

Contributed Capital 17,000,000 1.10 18,700,000 0.5 1.10 18,700,000 0.5
Additional contributed capital 3,000,000 1.17 3,510,000 0.5 1.17 3,510,000 0.5
Retained Earnings 3,395,000 3,906,800 0.5 3,824,250 0.5
Foreign Currency Translation
2,039,750
Reserve (if applicable) 1
Accounts Payable 2,000,000 1.20 2,400,000 0.5 1.20 2,400,000 0.5
Total Liabilities and Equity 25,395,000 28,516,800 30,474,000

Equipment (net) 17,850,000 1.10 19,635,000 0.5 1.20 21,420,000 0.5

Building (net) 4,055,000 1.16 4,703,800 0.5 1.20 4,866,000 0.5
Inventory 500,000 1.18 590,000 1.20 600,000
Cash and accounts receivable 2,990,000 1.20 3,588,000 1.20 3,588,000
Total Assets 25,395,000 28,516,800 30,474,000
Total 8 Total 8
Beginning net monetary
position 1,000,000 1.10 1,100,000 Beginning net asset 20,000,000 1.10 22,000,000
Capital contribution 3,000,000 1.17 3,510,000 Capital contribution 3,000,000 1.17 3,510,000
Sales 7,000,000 1.15 8,050,000 Net profit 895,000 1,094,250
Purchase of building (4,110,000) 1.16 4,767,600 Dividends (500,000) 1.14 (570,000)
Purchases (4,000,000) 1.15 4,600,000 26,034,250
Other expenses (400,000) 1.15 460,000 Ending net asset 23,395,000 1.20 28,074,000
Tax (1,000,000) 1.15 1,150,000 FC translation reserve 2,039,750
Dividends (500,000) 1.14 570,000
1,112,400
Ending net monetary position 990,000 1.20 1,188,000
FC Gain 75,600