e following information relates to questions 19 and 20 Jn 1 of October 2021, Strange Co which is a company that uses dollars ($) as its functional currency. buys goods from a supplier abroad, who uses dinars (D) as a functional currency The selling price for the goods is D70,000. The payment is still outstanding at the reporting date of 31" December 2021. The prevailing exchange rates are: 1 October 2021: D1.68:$1 31 December 2021: D1.85:$1 1/3/2021 70000/1.65 = 541667 31/12/201 1000/185:37,738 19. The Initial transaction should be recognised as follows: A. Debit Inventory $41,667 and Credit Receivables $41,667 B. Debit Inventory $37,838 and Credit Receivables $37.838 Debit Purchases $41,667 and Credit Payables $41,667 Debit Purchases $37,838 and Credit Payables $37,838 3829 Or Paybles (2 marks) 20. How should the transaction be recognised as at 31" December 20217 A Dr Payables $3,830 and CR Profit or Loss $3,830 with Exchange Gain B. Dr Payables'$37,837 and Cr Purchases $37,837 C. Dr Profit or Loss $3,830 and Cr Payables $3,830 with Exchange Loss D. None of the above The information below relates to questions 21-23. (2 marks) On 1 January 2021 the fair value of a property of Highlanders Ltd was 300,000 with a remaining life of 20 years. Highlanders's policy is to revalue its property every year end. At 31 December 2021 the property was valued at 258,000. On the same date the revaluation balance (surplus) was 60,000 which relates entirely to this property. Highlanders Ltd does not make a transfer to realized profit for excess depreciation 21.The Profit/Loss on Revaluation is: A Profit 27,000 B. Loss 27,000 Profit 42,000 DLoss 42,000 (2 marks) A. -22. The revaluation surplus as shown on the revaluation account as at 31" December 2021 was: 27,000 B. 12,000 33,000 D 60,000 (2 marks) 23.If the revaluation surplus account did not exist, any loss on revaluation would be taken to: A Statement of Profit or Loss B. Share Capital Account C. Current Liabilities D. None of the above (2 marks) The following information relates to questions 24,25 and 26: SocProducts Ltd opens a new factory and receives a government grant of 30,000 in respect of machinery bought for 200,000. It's the company's policy to depreciate machinery at 20% on a straight line basis. 24. How does the above transaction impact the Profit or Loss statement if the company chooses the second method, which treats the grant as a deferred credit? A. Debit with Depreciation of 40,000 B. Credit with Government Grant of 30,000 C. Credit with Government Grant of 6,000 200000/2010 = 40000 D. Debit with Depreciation of 40,000 and Credit with Government Grant of 6,000. (2 marks)