Question
Task 1 Background H company operates and maintains a number of power stations and dams throughout the State of Tasmania.A lot of the specialised parts
Task 1
Background
H company operates and maintains a number of power stations and dams throughout the State of Tasmania.A lot of the specialised parts that are required to maintain or refurbish this plant and equipment come from overseas countries.
In order to minimise fluctuations in the exchange rates, H enters into hedge contracts.
Question
Please provide the necessary journal entries and workings for the below transactions:
HT orders a new turbine from Turbine Inc. who reside in Switzerland on 1 March, at a cost of 1,000,000 Euros, the exchange rate on this day is 0.5.
Turbine Inc. ship the Turbine on 1 April, the exchange rate on 1 April is 0.55.Turbine Inc. also issue an invoice to HT on 1 April.
The new turbine is installed and ready for use at a HT location on 30 April, the exchange rate on 30 April is 0.6.
On 1 March HT entered into a hedge contract buy 1,000,000 Euros to minimise any future foreign exchange fluctuations on the purchase of the turbine.
On 30 April HT paid the invoice to Turbine Inc. and closed out the hedge agreement.
Task 2
Background
It is March 2019 month end and as part of this process you have been asked to post a number of month end journals.
You received the below information;
1.On the last day of the month $1,200,000 of Energy revenue was received into the bank account that had not previously been accrued.
2.An annual licence fee of $600,000 that relates to the period 1 January 2019 to 31 December was fully expensed in March 2019.What entry would be required to show the correct YTD expense of that licence fee?
3.Accounts payable closes on the last day of the month.The following three invoices were received after the close, what entries would be required for each of them.
a.Licence fee $300,000 that relates to the period 1 November 2018 to 31 October 2019
b.General expense invoice for $50,000 that relates to March 2019
c.General expense invoice for $200,000 that relates to April 2019
4.Depreciate for motor vehicles of $30,000 for March
5.Book a YTD income tax provision for March
Question
Using the information and space above, show the journals required for each entry and then prepare a final March Income Statement and Balance Sheet using the template provided below.
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