QUESTION 5 (10 marks)

Sherwee Product Ltd is an Australian company with a functional currency of A$. The company entered into a number of transactions denominated in US$ during the year ended 30 June 2020.

Given that the closing exchange rate is A$1.00 = US$0.76, determine the translated amount that will be included in the financial statements for each of the following transactions or events.

(a) Credit sale of US$80 000 on 30 March 2020 when the exchange rate is A$1.00 = US$0.79. Received cash from debtor of US$35 000 on 30 June 2020. (6 marks)

(b) Credit purchase of inventories of US$250 000 on 15 June 2020 when the exchange rate is A$1.00 = US$0.72. The creditor remains unpaid at 30 June 2020. (4 marks)

(Australia country)