Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stranded Ltd is an Australian company that purchases inventories from Hammers plc, which is an English company. The following information is relevant to a recent

Stranded Ltd is an Australian company that purchases inventories from Hammers plc, which is an English company. The following information is relevant to a recent acquisition of inventories for 300 000 pursuant to a contract with terms including FOB shipping.

Date

Event

Exchange rate

11 May 2017

Inventories shipped

A$1 = 0.41

22 June 2017

Inventories delivered

A$1 = 0.42

30 June 2017

End of reporting period

A$1 = 0.43

31 July 2017

Cash payment of 300 000 to Hammers plc

A$1 = 0.39

Required:

In accordance with AASB 121/IAS 21, prepare all of the journal entries of Stranded Ltd that relate to the foreign currency purchase of inventories including all calculations and explanations where necessary e.g. why choose a certain date to process a transaction, what year end disclosures apply, what final profit or loss applies on the deal.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Karen BraunWendy Tietz

3rd Edition

0132890542, 978-0132890540

More Books

Students also viewed these Accounting questions

Question

Do not get married, wait until I come, etc.

Answered: 1 week ago

Question

Do not come to the conclusion too quickly

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago