1. Blue Ltd. Engages in transactions involving foreign currencies, namely Australian Dollars and U.S. Dollars. Blue Ltd. Engaged in the following transactions during 2022:
   1. Purchases Inventory on 1^st July for $50,000 US$ on account, with payment due in 30 days.
   2. Purchased inventory on 17^th July for 200,000 AUD$ on account, with payment due in 90 days.
   3. Purchased Inventory on 15^th August for 75,000 US $ on account, payment due date in 90 days.
   4. Paid for the entire purchase in transaction 1 on 17^th July.
   5. Paid for the entire purchase in transaction 2 on 15^th October.
   6. Paid for the entire purchase in transaction 3 on 3^rd November.

EXCHANGE RATES
Canadian Equivalencies	US$	AUD$
1st July	1.09	1.21
17th July	1.13	1.29
15th August	1.18	1.18
15th October	1.06	1.09
3rd November	1.09	1.18

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Required:

• Prepare Journal Entries for the above transactions. Blue Ltd. Maintains a perpetual Inventory system.
• Explain how the historical cost concept is applied to inventory purchases in a foreign currency.

Explain how an exchange gain or loss may arise relating to foreign currency payables