QUESTION 3 (IAS 21) (10 Marks)

Namibia power company Ltd (Nam power) is a provider of electricity power and has 30 September as its year-end. Its functional currency is Namibian dollar

On 1 July 2016, Nam Power ordered goods from at a cost of 75 000. The goods were shipped on 16 July 2016 to the destination point and were received in Windhoek on 1 August 2016. The suppliers invoice was settled on 31 October 2016. The transactions were done on CIF basis.

The following exchange rates applied during the year

Spot rates

1 N$

1 March 2016

13.80

1 July 2016

13.85

25 July 2016

12.90

1 August 2016

13.60

30 September 2016

13.20

31 October 2016

13.40

28 February 2017

13.70

30 September 2017

13.80

You are required to prepare the relevant journals for the 2016 financial year of Nam power to record the above transactions. Include any computations in your narratives