You are the chief financeofficer of an Australian listed company, Emerging Companies Ltd, that has a functional currency in A$ and a financial year end of 30 June. Emerging Companies Ltd enters into a range of sales and purchase contracts with foreign entities, and occasionally enters into foreign exchange contracts to hedge against foreign exchange risks.Some of these are listed in the following:

i)

On 27 May, 2020, Emerging Companies Ltd purchased inventory from a New Zealand supplier for NZ$50,000 on an FOB shipping contract. The inventory was shipped on 27 May 2020 and received in Australia on 16 June 2020. The account was paid on 3 July, 2020. Relevant exchange rates are:

	Date	Exchange Rate
	27 May 2020	NZ$1 = A0.93
	16 June 2020	NZ$1 = A0.92
	30 June 2020	NZ$1 = A0.90
	3 July 2020	NZ$1 = A0.95

ii)

On 1 June 2020, Emerging Companies Ltd sold inventory to a Malaysian customer for US$300,000 on an FOB destination contract, with payment due on 30 September 2020. The inventory was shipped on 1 June 2020, and received in Kuala Lumpur, Malaysia on 28 June 2020. On 1 June 2020, Emerging CompaniesLtd also entered into a forward exchange contract to sell US$300,000 on 30 September 2020, which it designated as a hedge of the customer account. On 30 September 2020, the Malaysian customer settled its account and the forward exchange contract was settled. Relevant exchange rates are:

	Date	Spot Rate	Forward rate for 30 September 2020
	1 June 2020	A$1 = US$0.74	A$1 = US$0.73
	28 June 2020	A$1 = US$0.75	A$1 = US$0.74
	30 June 2020	A$1 = US$0.76	A$1 = US$0.75
	30 September 2020	A$1 = US$0.77	A$1 = US$0.77

iii)

As part of a strategy to expand operations into New Zealand, Emerging Companies Ltd purchased some land in New Zealand on 1 February 2020 for NZ$750,000. Emerging Companies Ltd settled this account on 1 March 2020. The land was revalued on 30 June 2020 to NZ$800,000. Relevant exchange rates are:

	Date	Exchange Rate
	1 February 2020	NZ$1 = A0.85
	1 March 2020	NZ$1 = A0.86
	30 June 2020	NZ$1 = A0.90

Question 4 continued.

Requirement:

Prepare the journal entries for Emerging Companies Ltd to record the above transactions and foreign exchange movements. Show all workings and journal narrations.

(15 marks)