ACCA FR · Guided practice (Show me how)
Chapter 17: Foreign currency (IAS 21)
Foreign currency transactions - initial recording, year end and settlement
Jones Inc. has the US dollar as its functional currency. It trades with several suppliers overseas and bought goods costing 400,000 Dinar on credit on 1 December 2017. Jones paid for the goods on 10 January 2018. Jones's year end is 31 December. The exchange rates were:
The goods were still in inventory at 31 December 2017. Answer to the nearest $.
Recording the purchase and the year end
Calculate Jones Inc.'s initial purchase amount, its payable at 31 December 2017 and the exchange difference recognised in 2017, and state the exchange rate at which the inventory is carried at 31 December 2017.
Settling the payable
Calculate Jones Inc.'s payment and exchange difference on settlement at 10 January 2018.
Opening this exercise…