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An entity purchases equipment from a foreign supplier for €6 million on March 31, 20X6, when the exchange rate was €2 = $1. The entity also sells goods to a foreign customer for €3.5 million on April 30, 20X6, when the exchange rate was €1.75 = $1. At the entity's year-end of May 31, 20X6, the amounts have not been paid. The closing exchange rate was €1.5 = $1. The entity's functional currency is the dollar.
Required
Calculate the exchange differences that would be recorded in profit or loss for the period ending May 31, 20X6.
What unexpired period costs are associated with the May information?
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