Part B: Foreign Currency transactions

On 27 January 2017 Robertson Very Ltd (Robertson) entered a transaction with a New Zealand firm, Franks Ltd to purchase a scrummaging machine for NZD500,000. The equipment was air freighted to Sydney on 22 February 2017. The end of the financial year is 30 June and payment is due on 1 August 2017.

The exchange rates over this period are:

27 January 2017 AUD1.00 = NZD1.105

22 February 2017 AUD1.00 = NZD1.068

30 June 2017 AUD1.00 = NZD1.051

1 August 2017 AUD1.00 = NZD1.079

Required

Prepare journal entries for Robertson Ltd that are required by AASB 121 Foreign Currencies

Please provide explanations to the solutions from the question above. Solution is provided above. Thanks!

Part B 27 January Nothing | 22 February 468,165 Asset A/Pay 1 468,165 1 30 June 7,573 FX Loss A Pay 1 7.5731 1 August 12,345 A/Pay FX Gain 1 12,3451 463,392 A Pay Cash 1 463,3921