Aus Co Ltd Has a Foreign Operation Based in New

question 21

Multiple Choice

Aus Co Ltd has a foreign operation based in New Zealand.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: $$\begin{array} { | l | r |} \hline & \text { \$NZ 000 } \\\hline \text { Machinery (purchased 1 July 2013, revalued 1 June 2015) } & 13000 \\\hline \text { Inventory on hand (purchased last quarter 2015) } & 9800 \\\hline \text { Depreciation expense-machinery } & 700 \\\hline \text { Land (purchased 1 July 2013) } & 75000 \\\hline\end{array}$$ Exchange rate information is:
$$\begin{array} { | l | l | } \hline \text { July } 2013 & \text { A\$1.00 } = \text { \$NZ 1.1255 } \\\hline \text { Average for year ended } 30 \text { June } 2015 & \text { A\$1.00 } = \text { \$NZ 1.2135 } \\\hline 1 \text { June } 2015 & \text { A\$1.00 } = \text { \$NZ 1.1024 } \\\hline \text { Last quarter } 2015 & \text { A\$1.00 } = \text { \$NZ 1.2503 } \\\hline 30 \text { June } 2015 & \text { A\$1.00 = \$NZ 1.3250 } \\\hline\end{array}$$ What is the amount at which each item will be translated (rounded to the nearest A$) ?

• A)
• \[\begin{array} { | l | r | }
• \hline & { \text { A\$ } } \\
• \hline \text { Machinery } & 17225000 \\
• \hline \text { Inventory on hand } & 1298500 \\
• \hline \text { Depreciation expense-machinery } & 849450 \\
• \hline \text { Land } & 99375000\\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | l | r | }
• \hline & { \text { A\$ } } \\
• \hline \text { Machinery } & 9811321 \\
• \hline \text { Inventory on hand } & 9396226 \\
• \hline \text { Depreciation expense-machinery } & 576844 \\
• \hline \text { Land } & 56603774 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | r | }
• \hline & { \text { A\$ } } \\
• \hline \text { Machinery } & 14331200 \\
• \hline \text { Inventory on hand } & 12252940 \\
• \hline \text { Depreciation expense-machinery } & 771680 \\
• \hline \text { Land } & 84412500 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l | r | }
• \hline & { \text { A\$ } } \\
• \hline \text { Machinery } & 11792453 \\
• \hline \text { Inventory on hand } & 7838119 \\
• \hline \text { Depreciation expense-machinery } & 634978 \\
• \hline \text { Land } & 66637050 \\
• \hline
• \end{array}\]

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Definitions:

Banking Section

Part of financial management software where users can access and manage their bank transactions, reconciliations, and financial records related to bank accounts.

Pay Employees

The process of compensating workers for their services, typically executed through payroll systems on a regular schedule.

Reduces Liability

This term generally refers to actions or strategies that decrease the legal responsibilities or debts of a business or individual.

Checking Account

A bank account that allows for numerous withdrawals and deposits, often used for day-to-day transactions.