Banjo Ltd Acquired 100% of Wellington Ltd on 1 July $\text { Balance sheet at } 1 \text { July } 2021$

question 21

Multiple Choice

Banjo Ltd acquired 100% of Wellington Ltd on 1 July 2021. The balance sheet of Wellington Ltd on that date was as follows: $\text { Balance sheet at } 1 \text { July } 2021$
$\begin{array}{llll}&N Z \$&&N Z \$\\\text { Machinery at cost } & 560,000 & \text { Share capital } & 400,000 \\\text { Investment property } & 400,000 & \text { General reserve } & 200,000 \\\text { Receivables } & 100,000 & \text { Retained earnings } & 600,000\\\text { Cash }&140,000&&1,200,000\\&1,200,000\end{array}$ The balance sheet of Wellington Ltd as at 30 June 2022 is as follows:
Balance sheet as at 30 June 2022
$\begin{array}{lll}&N Z \$&&N Z \$\\\text { Machinery - carrying value } & 300,000 & \text { Share capital }&400,000 \\\text { Investment property } & 400,000 & \text { General Reserve }&200,000 \\\text { Receivables } & 500,000 & \text { Retained earnings }&1,000,000 \\\text { Cash } & 600,000 & \text { Accounts payable }&170,000\\&&\text { Income tax payable }&30,000\\&1,800,000&&1,800,000\end{array}$ Relevant exchange rates are as follows:
$\begin{array}{lll}&\mathrm{NZ} \$&A\$\\1 \text { July } 2021 & 1.00= & 0.95 \\\text { 30 June 2022 } & 1.00= & 0.85 \\\text { Average 2021-22 } & 1.00= & 0.90\end{array}$ 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:

• A) $1,560,000
• B) $1,530,000
• C) $1,710,000
• D) $1,620,000

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Definitions:

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