=+614 INTERNATIONAL FINANCIAL ACCOUNTING AND REPORTING Challenging Questions Question 1 (Based on ICAI, P3 Summer 1997, Question 4)

The year end of STUNT Limited (STUNT) is 31 December. é

(a) On 1 December 2003, STUNT purchased raw materials from DENVER Limited, its US supplier, for $84,000 with payment due on 31 January 2004. The prevailing exchange rates were as follows:

1 December 2003 €1 = $1.58 31 December 2003 €1 = $1.56 31 January 2004 €1 = $1.60 2003 average rate €1 = $1.59 Requirement .