Mong Kok Ltd Financials: Translated Accounts Analysis
Mong Kok Ltd: Translated Accounts as at 30 June 2018
| HK$ | Exchange Rate | A$ | |
|---|---|---|---|
| Sales | 595,000 | 0.85 | 505,750 |
| Cost of Sales | 400,000 | 0.85 | 340,000 |
| 195,000 | 165,750 | ||
| Expenses | 100,000 | 0.85 | 85,000 |
| 95,000 | 80,750 | ||
| Tax Expense | 20,000 | 0.85 | 17,000 |
| Profit for the Period | 75,000 | 63,750 | |
| Retained Earnings (1/7/17) | 450,000 | 366,000 | |
| 525,000 | 429,750 | ||
| Dividend Paid | 25,000 | 0.80 | 20,000 |
| Retained Earnings (30/6/18) | 500,000 | 409,750 | |
| Share Capital | 200,000 | 0.80 | 160,000 |
| General Reserve | 100,000 | 0.80 | 80,000 |
| FCTR | (25,750) | ||
| 800,000 | 624,000 | ||
| Current Assets | 250,000 | 0.78 | 195,000 |
| Property, Plant & Equipment (net) | 500,000 | 0.78 | 390,000 |
| Patents and Trademarks | 150,000 | 0.78 | 117,000 |
| 900,000 | 0.78 | 702,000 | |
| Liabilities | 100,000 | 0.78 | 78,000 |
| 800,000 | 624,000 |
Retained Earnings Balance at 1 July 2017
| Retained Earnings (1/7/15) | = | HK$300,000 x 0.80 |
| = | A$240,000 | |
| Profit 2015-16 | = | HK$100,000 x 0.82 |
| = | A$82,000 |
Profit 2016-17 = HK$50,000 x 0.88
= A$44,000
Retained Earnings (1/7/17) = A$366,000
| Cymbal Ltd | 40% | Gong Ltd |
| At 1 July 2013: | ||
| Net Fair Value of Identifiable Assets and Liabilities of Gong Ltd | ||
| = | $125,000 + $11,000 | |
| Net Fair Value Acquired | = | $136,000 |
| = | 40% x $136,000 | |
| = | $54,400 | |
| Cost of Investment | = | $63,200 |
| Goodwill | = | $8,800 |
Cymbal Ltd Does Not Prepare Consolidated Financial Statements
Profit for the period 2015–2016: $18,100
Adjustments for inter-entity transactions: Unrealised profit on motor vehicle
| Profit on sale $3,000 (1 – 30%) less ½ x 20% x $2,100 | (1,890) |
| Realised profit in opening inventory | |
| $800 (1 – 30%) | 560 |
| Unrealised profit in ending inventory | |
| $1,600 (1 – 30%) | (1,120) |
| $15,650 |
Investor’s share – 40%: $6,260
Entries in the Books of Cymbal Ltd at 30 June 2016
| Cash Investment in Gong Ltd | Dr Cr | 1,600 | 1,600 |
| (40% x $4,000 – dividend paid) | |||
| Dividend receivable Investment in Gong Ltd | Dr Cr | 2,000 | 2,000 |
| (40% x $5,000 – dividend declared) | |||
| Investment in Gong Ltd Share of profits or losses of associates | Dr Cr | 6,260 | 6,260 |
Cymbal Ltd Prepares Consolidated Financial Statements
Change in retained earnings 2014–2015: $5,000
($16,000 – $11,000)
Adjustments for inter-entity transactions:
Unrealised profit in ending inventory
$800 (1–30%): (560)
$4,440
Investor’s share – 40%: $1,776
Consolidation Worksheet Entries at 30 June 2016
| Investment in Gong Ltd Retained earnings (1/7/15) | Dr Cr | 1,776 | 1,776 |
| Investment in Gong Ltd Share of profits or losses of associates | Dr Cr | 6,260 | 6,260 |
| Dividend revenue Investment in Gong Ltd | Dr Cr | 1,600 | 1,600 |
| (40% x $4,000 – dividend paid) | |||
| Dividend revenue Investment in Gong Ltd | Dr Cr | 2,000 | 2,000 |
(40% x $5,000 – dividend provided)