- May 9, 2021 at 11:01 pm #620171
HI I WANT TO ASK THAT HOW WO GET THE LOSS OF 207?
AN ENTITY TOOK OUT LOAN FOR 12M DINARS ON 1 JANUARY 20X1 . IT REPAID 3M DINARS TO THE BANK ON 30 NOVEMBER 20X1. THE ENTITY HAS A REPORTING DATE OF 31 DECEMBER 20X1 AD FUNCTION CURRENCY OF DOLLARS $ ECHANGE RATE ARE AS FOLLOWS :
1 JANUARY 20X1 6:0
30 NOVEMBER 20X1 5:0
31 DECEMBER 20X1 5:6
WHAT IS THE TOTAL LOSS ARISING TO THE NEAREST 000 ON THE ABOVE TRANSACTION IN THE YEAR ENDED 31 DECEMBER 20X1
ANSWER IS = $207000May 12, 2021 at 6:31 pm #620427
You need to calculate the loan amount in dollars at the date of initial recognition and then its amount at the reporting date of 31 December.
Give it a go and see how you get on. Let me know if you are still struggling.
ThanksMay 14, 2021 at 1:22 pm #620582
hi sir i still have issue …. can u explain numericallyMay 17, 2021 at 7:37 pm #620864
You need to start with the 12m at the 6.0 exchange rate, which gives 2,000,000.
When we pay 3m at 5.0 exchange rate, this gives 600,000 and a remaining balance of 1,400,000
The closing figure is the 9m at the 5.6, which gives 1,607,142.
The difference between the 1,400,000 and 1,607,142 is the figure that you are looking for.
ThanksMay 19, 2021 at 2:12 pm #621056
thanku sir i got itMay 19, 2021 at 2:16 pm #621057
thanku so much sir u make it quite easier for me to understandMay 19, 2021 at 10:15 pm #621133
Glad you have got it. It wasn’t an easy one to answer and even I had to take my time on it.
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