Question: 1. Ruby Berhad, a Malaysian company signed a contract on 1 December 2019 to buy a machinery from Ecuador payable in 60 days from the

1. Ruby Berhad, a Malaysian company signed a contract on 1

1. Ruby Berhad, a Malaysian company signed a contract on 1 December 2019 to buy a machinery from Ecuador payable in 60 days from the purchase date. Ruby Berhad's financial year ended on 31 December. The machinery's price was estimated at USD 1 , 000 , 000 . The spot exchange rate between Ringgit Malaysia (RM) and the USD on that date was, 1 USD = RM4.3. The exchange rate at the end of the financial year was 1 USD = RM4.28 and the exchange rate at the settlement date, 31 January 2020 was 1 USD = RM4.25. (a)Prepare the journal entries to record the purchase of the machinery on 1 December 2019. (b)Prepare the journal entries to record the unrealised gain on 31 December 2019 using: i. Direct deduction from account payable ii. Provision account. (8) (c)Prepare the journal entry to record the settlement on 31 January 2020. (8)

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