n 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, whichrequires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of themachinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland onthat date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.The exchange rates at the relevant dates are:1 March 2011 A$1.00 = NZ$1.201 June 2011 A$1.00 = NZ$1.3030 June 2011 A$1.00 = NZ$1.25Required:a) Determine the amount in AUD, as at:• 1 March 2020; and• 30 June 2020. b) Prepare the journal entries for the above dates showing the amount of exchange gain or loss (

n 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, whichrequires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of themachinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland onthat date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.The exchange rates at the relevant dates are:1 March 2011 A$1.00 = NZ$1.201 June 2011 A$1.00 = NZ$1.3030 June 2011 A$1.00 = NZ$1.25Required:a) Determine the amount in AUD, as at:• 1 March 2020; and• 30 June 2020. b) Prepare the journal entries for the above dates showing the amount of exchange gain or loss (

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 22PC

See similar textbooks

Similar questions

On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, whichrequires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of themachinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland onthat date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.The exchange rates at the relevant dates are:1 March 2011 A$1.00 = NZ$1.201 June 2011 A$1.00 = NZ$1.3030 June 2011 A$1.00 = NZ$1.25Required: Prepare the journal entries for the above dates showing the amount of exchange gain or loss
On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, whichrequires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of themachinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland onthat date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.The exchange rates at the relevant dates are:1 March 2020 A$1.00 = NZ$1.2030 June 2020 A$1.00 = NZ$1.301 June 2021 A$1.00 = NZ$1.25Required:a) Determine the amount in AUD, as at:• 1 March 2020; and• 30 June 2020. b) Prepare the journal entries for the above dates, up to 1 June 2021, showing the amount of exchangegain or loss. Please put all entries up to 1 June 2021.
On 1 March 2020Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date.The exchange rates at the relevant dates are: 1 March 2020A$1.00 = NZ$1.20 1 June 2020A$1.00 = NZ$1.30 30 June 2020A$1.00 = NZ$1.25 Required: a) Prepare the journal entries for the above dates, up to 1 June 2021,showing the amount of exchange gain or loss.
On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZS750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd's reporting date. The exchange rates at the relevant dates are: 1 March 2020 30 June 2020 1 June 2021 Required: A$1.00 = NZS1.20 AS1.00 = NZS1.30 AS1.00 = NZS1.25 a) Determine the amount in AUD, as at: • 1 March 2020; and 30 June 2020. b) Prepare the journal entries for the above dates, up to 1 June 2021, showing the amount of exchange gain or loss
On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date. The exchange rates at the relevant dates are: 1 March 2020 30 June 2020 1 June 2021 Required: A$1.00 = NZ$1.20 A$1.00 = NZ$1.30 A$1.00 = NZ$1.25 Prepare the journal entries for the above dates, up to 1 June 2021, showing the amount of exchange gain or loss