On 1 March 2021 Dora Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand company to construct an item of machinery for Dora Ltd. The cost of the machinery is NZ$750 000. The machinery is completed on 1 June 2022 and shipped FOB to Auckland on that date. The debt is unpaid at 30 June 2022, which is also Dora Ltd's reporting date. The exchange rates at the relevant dates are: 1 March 2021 A$1.00 = NZ$1.20 30 June 2021 A$1.00 = NZ$1.15 1 June 2022 A$1.00 = NZ$1.30 30 June 2022 A$1.00 = NZ$1.25 Required: Provide the required journal entries of Dora Ltd for the years ending 30 June 2021 and 30 June 2022 to account for the above foreign currency transactions.
On 1 March 2021 Dora Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand company to construct an item of machinery for Dora Ltd. The cost of the machinery is NZ$750 000. The machinery is completed on 1 June 2022 and shipped FOB to Auckland on that date. The debt is unpaid at 30 June 2022, which is also Dora Ltd's reporting date. The exchange rates at the relevant dates are: 1 March 2021 A$1.00 = NZ$1.20 30 June 2021 A$1.00 = NZ$1.15 1 June 2022 A$1.00 = NZ$1.30 30 June 2022 A$1.00 = NZ$1.25 Required: Provide the required journal entries of Dora Ltd for the years ending 30 June 2021 and 30 June 2022 to account for the above foreign currency transactions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On 1 March 2021 Dora Ltd enters into a
binding agreement with a New Zealand
company, which requires the New Zealand
company to construct an item of machinery for
Dora Ltd. The cost of the machinery is NZ$750
000. The machinery is completed on 1 June
2022 and shipped FOB to Auckland on that
date. The debt is unpaid at 30 June 2022,
which is also Dora Ltd's reporting date.
The exchange rates at the relevant dates are:
1 March 2021
A$1.00 = NZ$1.20
30 June 2021
A$1.00 = NZ$1.15
1 June 2022
A$1.00 = NZ$1.30
30 June 2022
A$1.00 = NZ$1.25
Required:
Provide the required journal entries of Dora Ltd
for the years ending 30 June 2021 and 30 June
2022 to account for the above foreign currency
transactions.
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