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On 1 March 2024, Rork Ltd, an Australian company that has A$ as its functional currency, enters

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On 1 March 2024, Rork Ltd, an Australian company that has A\$ as its functional currency, enters into a firm commitment with a foreign supplier to buy an equipment for US\$500 000. The ownership of the equipment and the consideration for the purchase are transferred on 31 August 2024. On the same day as entering the firm commitment, Rork Ltd enters into a forward exchange contract to buy US\$500 000 on 31 August 2024. 

Assume a discount rate of \(0 \%\) for fair value calculations. Relevant exchange rates are as follows.

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Required Prepare the necessary entries for Rork Ltd up until and including 31 August 2024 in accordance with AASB 121/IAS 21.

Transcribed Image Text:

Spot rate US$1=A$1.36 1 Mar. 2024 30 Jun. 2024 US$1=A$1.37 31 Aug. 2024 US$1=A$1.38 Forward rate (for 31/8/2024) US$1=A$1.39 US$1=A$1.41 US$1=A$1.38

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Rustia Melrod
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