Cedar Limited is a company with a 31 March financial year-end. The company buys inventory from a supplier in England.
The following relates to a shipment of inventory purchased by Cedar Limited:
• The goods were shipped FOB on 12 March 2021.
• Cedar Limited received the goods on 1 April 2021.
• The cost of the goods amounted to £12 587.
• The purchase price was settled on 25 April 2021.
• The following exchange rates applied:
12 March 2021 £1 = R19.885
31 March 2021 £1 = R20.025
1 April 2021 £1 = R19.991
25 April 2021 £1 = R19.899
REQUIRED:
3.1) Prepare the journal entries required in the records of Cedar Limited for the financial year ending 31 March 2021.
3.2) Prepare the journal entries required in the records of Cedar Limited on 25 April 2021 when the amount to the foreign supplier is settled.