ABC Pty Ltd purchases inventory from DEF plc, a listed British company. Relevant events and the spot rates at each date are shown as follows:

REQUIRED

a. Prepare appropriate journal entries for each relevant event.

b. Assume that, instead of inventory, the purchase is plant and equipment, which is installed ready for use on 15 July 2022 when the rate is still A$1.00 = 42p. Prepare appropriate journal entries for each relevant event.

c. Concerned about the risks associated with fluctuations in exchange rates, the organisation is considering entering a foreign currency swap. Explain how this would be done by ABC Pty Ltd.

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Date 15 March 2022 11 May 2022 30 June 2022 02 July 2022 Event Spot rate A$1.00 = 37p Orders £300 000 of inventory Purchase takes place as inventory shipped to ABC Ltd (FOB) A$1.00 = 41p End of financial year A$1.00 = 43p Inventory arrives at warehouse A$1.00 = 42p