Fujitsu Ltd purchases inventory from DFO Ltd, a listed British company. Relevant events and the spot rates at each date are shown as follows:
|
Date |
Event |
Spot rate |
|
15 March 2019 |
Order £300,000 of inventory |
A$1.00 = £0.37 |
|
11 May 2019
|
Purchase takes place as inventory shipped to Fujitsu Ltd (FOB) |
A$1.00 = £0.41
|
|
30 June 2019 |
End of financial year |
A$1.00 = £0.43 |
|
02 July 2019 |
Inventory arrives at warehouse |
A$1.00 = £0.42 |
|
14 August 2019 |
Payment of £300,000 to supplier |
A$1.00 = £0.39 |
Required:
Fujitsu Ltd purchases inventory from DFO Ltd, a listed British company. Relevant events and the spot rates at each date are shown as follows:
Date
Event
Spot rate
15 March 2019
Order £300,000 of inventory
A$1.00 = £0.37
11 May 2019
The purchase takes place as inventory shipped to Fujitsu Ltd (FOB)
A$1.00 = £0.41
30 June 2019
End of the financial year
A$1.00 = £0.43
02 July 2019
Inventory arrives at the warehouse
A$1.00 = £0.42
14 August 2019
Payment of £300,000 to supplier
A$1.00 = £0.39
Required:
a) Prepare appropriate journal entries for each relevant event. (Round amounts to the nearest dollar).
b) What is a qualifying asset? Provide two (2) examples.
Fujitsu Ltd purchases inventory from DFO Ltd, a listed British company. Relevant events and the spot
rates at each date are shown as follows:
Date Event Spot rate
15 March 2019 Order £300,000 of inventory A$1.00 = £0.37
11 May 2019 Purchase takes place as inventory shipped to Fujitsu Ltd
(FOB)
A$1.00 = £0.41
30 June 2019 End of financial year A$1.00 = £0.43
02 July 2019 Inventory arrives at warehouse A$1.00 = £0.42
14 August 2019 Payment of £300,000 to supplier A$1.00 = £0.39
Required:
a) Prepare appropriate journal entries for each relevant event. show your working
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