Prepare appropriate journal entries for each relevant event

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Question - Fujitsu Ltd purchases inventory from DFO 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 Fujitsu 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 -

a) Prepare appropriate journal entries for each relevant event. Show your working.

b) What is a qualifying asset? Provide two (2) examples.

Reference no: EM132562788

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