Know Your Product Ltd is an Australian company with a functional currency = A$. The company...

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Accounting

Know Your Product Ltd is an Australian company with a functionalcurrency = A$. The company has entered into a number oftransactions denominated in US$ during the year ended 30 June 2017.The closing exchange rate is A$1.00 = US$0.77, determine thetranslated amount that will be included in financial statements foreach of the following balances. 1. Land at cost US$400 000 acquiredon 1 February 2017 when the exchange rate is A$1.00 = US$0.67. 2.Land revalued to US$600 000 on 30 June 2017 that had cost US$400000 on 1 February 2017 when the exchange rate is A$1.00 = US$0.67.3. Credit sale of US$80 000 on 12 March 2017 when the exchange rateis A$1.00 = US$0.69. Received cash from debtor of US$40 000 on 30June 2017. 4. Credit purchase of inventory of US$250 000 on 15 June2017 when the exchange rate is A$1.00 = US$0.62. The creditorremains unpaid at 30 June 2017. 5. A loan payable of US$800 000arranged on 1 January 2017 when the exchange rate is A$1.00 =US$0.60. On 30 June 2017, the outstanding interest on the loan isUS$20 000.

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Initial Recognition of transaction Transaction should be recognised by using the exchange rate as on the date of transaction Subsequent Recognition Subsequent recognition occurs when the items so initially recognised as above are required to be reported in the balance sheet at the year ending For subsequent recognisition in the financials the items shall be divided into monetary items and non monetary items 1Monetary See Answer

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