Reference no: EM132572137
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
15 March 2019 11 May 2019
30 June 2019 02 July 2019
14 August 2019
Event
Order £300,000 of inventory
Purchase takes place as inventory shipped to Fujitsu Ltd (FOB)
End of financial year
Inventory arrives at warehouse
Payment of £300,000 to supplier
Spot rate A$1.00 = £0.37 A$1.00 = £0.41
A$1.00 = £0.43 A$1.00 = £0.42 A$1.00 = £0.39
Required -
a) Prepare appropriate journal entries for each relevant event.
b) What is a qualifying asset? Provide two (2) examples.