Lennon Ltd Has Two Foreign Operations Based in Japan Exchange Rate Information Is

question 5

Multiple Choice

Lennon Ltd has two foreign operations based in Japan.The following information was extracted from the foreign operation's accounts for the period ended 30 June 2015: $$\begin{array} { | l | r | r | } \hline \text { In Japanese yen } ( ¥ ) & \text { Yoko Ltd } & \text { Ono Ltd } \\\hline \text { Machinery (at cost purchased 1 July 2013) } & 85000 & 100000 \\\hline \text { Inventory on hand (purchased second quarter 2015) } & 1000 & 25000 \\\hline \text { Depreciation expense-machinery } & 8200 & 10000 \\\hline \text { Land (purchased 1 July 2013, revalued 1 June 2015) } & 150000 & 200000 \\\hline\end{array}$$ Exchange rate information is:
$$\begin{array} { | l | l | } \hline \text { July } 2013 & \text { A\$1.00 } = ¥ 74 \\\hline \text { Average for year ended } 30 \text { June } 2015 & \text { A\$1.00 } = ¥ 65 \\\hline 1 \text { June } 2015 & \text { A\$1.00 } = ¥ 68 \\\hline \text { Second quarter } 2015 & \text { A\$1.00 } = ¥ 67 \\\hline 30 \text { June } 2015 & \text { A\$1.00 } = ¥ 61 \\\hline\end{array}$$ The translation from Japanese yen to Australian dollars resulted in the following balances (rounded to the nearest ¥000) :
$$\begin{array} { | l | r | r | } \hline \text { In Japanese yen } ( ¥ \text { ) } & \text { Yoko Ltd } & \text { Ono Ltd } \\\hline \text { Machinery (at cost purchased 1 July 2013) } & 1149 & 1639 \\\hline \text { Inventory on hand (purchased second quarter 2015) } & 239 & 410 \\\hline \text { Depreciation expense-machinery } & 111 & 154 \\\hline \text { Land (purchased 1 July 2013, revalued 1 June 2015) } & 2205 & 3278 \\\hline\end{array}$$ Which of the following translation processes were applied to Yoko Ltd and Ono Ltd,respectively,for the year ended 30 June 2015?

• A) functional currency; presentation currency
• B) functional currency; functional currency
• C) presentation currency; functional currency
• D) presentation currency; presentation currency

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Definitions:

Notice of the Hearing

A formal document sent to involved parties indicating the time, date, and place of a forthcoming legal hearing.

Punitive Damages

Monetary compensation awarded to a plaintiff, over and above actual damages, to punish a defendant for egregious conduct.

Tort of Battery

A legal claim against someone who intentionally causes harmful or offensive physical contact with another person.

Compensatory Damages

Financial compensation awarded to a plaintiff to offset losses or injuries that have occurred due to the defendant's actions.