Question
Translation of purchase of inventories on credit terms Stranded Ltd is an Australian company that purchases inventories from Hammers plc, which is an English company.
Translation of purchase of inventories on credit terms
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 300000 to Hammers plc
A$1 = 0.39
Required
In accordance with AASB 121/IAS 21, show all of the entries of Stranded Ltd that relate to the foreign currency purchase of inventories. How would your answer change if the inventories acquired had a net realisable value of 270000 at 30 June 2017?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Data Analysis And Decision Making
Authors: Christian Albright, Wayne Winston, Christopher Zappe
4th Edition
538476125, 978-0538476126
