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On 1 October 2015, Mirvac Ltd acquires goods on credit from a US supplier. The cost of the goods is US$400,000 and this amount remains
On 1 October 2015, Mirvac Ltd acquires goods on credit from a US supplier. The cost of the goods is US$400,000 and this amount remains unpaid at 31 December 2015 at the time of year end accounts closing. The amount was paid at 20 January 2016.
On 1 October 2015, the exchange rate is A$1.00 = US$ 0.71.
On 31 December 2015, the exchange rate is A$1.00 = US$ 0.73.
On 20 January 2016, the exchange rate is A$1.00 = US$0.70
Required:
- Determine the amount of the debt in AUD, as at: (3 marks)
- 1 October 2015 and
- 31 December 2015.
- 20 January 2016
(ii) Prepare the journal entries for the above dates showing the amount of exchange gain or loss. (4 marks)
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