Question 1 (25 marks)

Matlhakala (Pty) Ltd in Botswana sold goods overseas for 200,000 on 28 March 2013 when the exchange rate was 0.65: P1. The customer paid in April 2013 when the rate was 0.70: P1. The exchange rate at the year ended 30 June 2013 was 0.75: P1.

Prepare the journal entries to record the sale of the goods by the Botswana entity. (2)

Show the journal entries to record the payment in April 2013. (2)

If the amount was outstanding at the year-end, Calculate the gain or loss in the statement of profit or loss be? (4)

Matlhakala (Pty) Ltd in Botswana purchased goods for 200,000 on 28 March 2013 when the exchange rate was 0.65: P1. The exchange rate at the year ended 30 June 2013 was 0.75: P1. If the goods were unsold at the year-end, Calculate the value of inventory? (3)

Make a distinction of the following terms:

Functional currency and presentation currency. (2)

Exchange difference and foreign operation (2)

The e-library Botswana is a company registered in Botswana; it sells e-books across the globe. The e-books are sold via the e-library website and through other big shops. The products which are sold online and in stores are the same.

E-library is selling its newly released book on nature for P40 each in stores, and for P30 each online.

The chief operating decision maker requires for its internal reports that online sales are reported separately to sales in stores. Only in the financial statements will these two separate business sales be aggregated together.

You are required to:

In line with the operating segments disclosure, discuss if these two separate businesses are to be aggregated into a single segment, (10)