On January 1,20X7,Clock Inc

question 32

Essay

On January 1,20X7,Clock Inc.of Vancouver,British Columbia,purchased 75% of the outstanding shares of Time Limited,in London England.Time Limited's statements of financial position,statements of comprehensive income and changes in equity - retained earnings section for the year ended December 31,20X7 are below.


Additional information:
1.Time was incorporated on January 1,20X3 when it acquired all its equipment for £4,005,000 and issued its 10 year bonds payable.
2.Time's purchases and sales occurred evenly over the year.Inventories on hand at December 31,20X6 and December 20X7 were purchased evenly over the last quarter of 20X6 and 20X7,respectively.Inventories as at December 31,20X7 were £650,000.
3.Dividends were paid on March 31,20X7.
4.Foreign exchanges rates are as follows:
Required:
Translate Time's statement of financial position as at December 31,20X7 into Canadian dollars assuming its functional currency is British pound sterling.Include a calculation to prove the amount of the cumulative foreign exchange translation gains and losses.