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$1.201 June 2020 A$1.00 = NZ$1.3030 June 2020 A$1.00 = NZ$1.25Required:a) Determine the amount in AUD, as at:• 1 March 2020; and• 30 June 2020
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$1.201 June 2020 A$1.00 = NZ$1.3030 June 2020 A$1.00 = NZ$1.25Required:a) Determine the amount in AUD, as at:• 1 March 2020; and• 30 June 2020
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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 A$1.00 = NZ$1.20
1 June 2020 A$1.00 = NZ$1.30
30 June 2020 A$1.00 = NZ$1.25
Required:
a) Determine the amount in AUD, as at:
• 1 March 2020; and
• 30 June 2020
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