On 15 May 2020 Penn Ltd, an Australian company with functional currency of Australian dollars acquires goods on credit from a supplier in Cardiff. The goods are shipped FOB Cardiff on 15 May 2020. The cost of the goods is UK200,000 and the debt remains unpaid at 30 June 2020. On 15 May 2020 the exchange rate is A$1.00 = UK0.56. On 30 June 2020 it is A$1.00 = UK0.53. Penn Ltd's reporting date is 30 June. Provide the accounting entries necessary to account for the above purchase transaction for the year ending 30 June 2020.
On 15 May 2020 Penn Ltd, an Australian company with functional currency of Australian dollars acquires goods on credit from a supplier in Cardiff. The goods are shipped FOB Cardiff on 15 May 2020. The cost of the goods is UK200,000 and the debt remains unpaid at 30 June 2020. On 15 May 2020 the exchange rate is A$1.00 = UK0.56. On 30 June 2020 it is A$1.00 = UK0.53. Penn Ltd's reporting date is 30 June. Provide the accounting entries necessary to account for the above purchase transaction for the year ending 30 June 2020.
Chapter10: Measuring Exposure To Exchange Rate Fluctuations
Section: Chapter Questions
Problem 2ST
Related questions
Question
100%
On 15 May 2020 Penn Ltd, an Australian company with functional currency of Australian dollars acquires goods on credit from a supplier in Cardiff. The goods are shipped FOB Cardiff on 15 May 2020. The cost of the goods is UK200,000 and the debt remains unpaid at 30 June 2020. On 15 May 2020 the exchange rate is A$1.00 = UK0.56. On 30 June 2020 it is A$1.00 = UK0.53. Penn Ltd's reporting date is 30 June. Provide the accounting entries necessary to account for the above purchase transaction for the year ending 30 June 2020.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning