Brunshield Ltd operates in St Lucia and trades with the United States. The functional currency is the Eastern Caribbean dollar (XCD$). The following transactions occurred in March 2021.

a) sold goods valued at USD$850,000 to Crytfield Ltd, an American company, on March 4, 2021 when the spot exchange rate was USD$1 = XCD$2.80. Crytfield Ltd is given 30 days to pay. The exchange rate at the date of payment is USD$1 = XCD $2.75

b) bought goods from Halsforf Ltd for USD$120,000 on March 15, 2021 when the spot exchange rate was USD$1 = XCD $2.72 and has 15 days to pay. The exchange rate at the date of payment is USD$1 = XCD $2.88

1. Prepare the journal entries to account for these transactions at the transaction date.
2. Prepare the journal entries at the date payment is made and received.
3. Assuming the year end for Brunshield Ltd is March 31st, calculate the amounts to be included in the Balance Sheet and Profit and Loss as at that date. The exchange rate at March 31st 2021 is USD$1 = XCD $2.65.

This is for Advance Accounting and can type in word so that I copy and paste to my document.

Answer rating: 100% (QA)

IAS 21 requirements for reporting using the functional currency and the presentation currency Functional Currency is the currency of the primary economic environment in which the entity operates Prese... View the full answer