Manco Limited has entered into the following transactions involving foreign currencies during the year ended 31 March 2018.

1. A 20-year loan of US$1,000,000 was obtained from an American bank on 1 August 2017.

The proceeds of the loan were remitted when the exchange rate was US$1.75 = €1.

2. A special machine was purchased from a South American supplier, FRITZ, on 1 October 2017 for DM55,000 when the exchange rate was DM3.15 = €1. This machine is estimated to have an effective useful life of five years, and the company’s policy is to use the straight-line method of depreciation commencing on the date of acquisition. Payment for this machine was made in full on 15 December 2017, when the exchange rate was DM3.00 = €1.

3. Goods for resale were purchased from a Brazilian supplier, Etien, on 12 February 2018, for BFr600,000 when the exchange rate was BFr68.00 = €1. This amount was still unpaid at 31 March 2018.

The accountant at Manco Limited, who has never before had to deal with transactions involving foreign currencies, kept the above notes but has made no entries whatsoever in the books in respect of these transactions. The relevant exchange rates at 31 March 2018 were as follows:

US$1.80 = €1.00 DM3.20 = €1.00 BFr69.50 = €1.00 Requirement

(a) Prepare journal entries (including cash) to show the accountant of Manco Limited how each of the transactions (1) to (3) above, in respect of the year ended 31 March 2018, should be entered into the books of Manco Limited;

(b) Show how each of the transactions (1) to (3) above would be included in the accounts of Manco Limited for the year ended 31 March 2018 by preparing appropriate extracts from the accounts for each transaction. (It is sufficient to indicate the amounts which should be included under the appropriate heading in the statement of financial position and statement of profit or loss and other comprehensive income.)