Determine the amount of the debt in aud

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Question

On 31 December 2015, the exchange rate is A$1.00 = US$ 0.73.

On 1 October 2015, Mirvac Ltd acquires goods on credit from a US supplier. The cost of the goods is US$400,000 and this amount remains unpaid at 31 December 2015 at the time of year end accounts closing. The amount was paid at 20 January 2016.

On 1 October 2015, the exchange rate is A$1.00 = US$ 0.71.

On 20 January 2016, the exchange rate is A$1.00 = US$0.70

Required:

(i) Determine the amount of the debt in AUD, as at:

· 1 October 2015 and

· 31 December 2015.

· 20 January 2016

(ii) Prepare the journal entries for the above dates showing the amount of exchange gain or loss.

Reference no: EM132953733

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