Sharp Ltd purchases inventory from Ace Ltd, a listed British company. Relevant events and the spot rates
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Question:
Sharp Ltd purchases inventory from Ace 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 Sharp 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:
Given the same events as in , assume that, instead of inventory, the purchase is plant and equipment, which is installed ready for use on 15 July 2019 when the rate is still A$1.00 = £0.42. Prepare appropriate journal entries for each relevant event, up to 15 July 2019. (Round amounts to the nearest dollar)
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