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Question 2 - 2"d semester 2013
On 1 February 2014, Candlenut Ltd signs a contract to purchase equipment from a manufacturer
located in the USA. The cost of the equipment is US$200,000. The construction of the equipment
is completed on 1 March 2015 and payment is made on 30 June 2015.
Additional information
Candlenut Ltd has financial years ending on 30 June. Relevant exchange rates are as follows:
1 February 2014
$AUD1 = US$0.77
30 June 2014
$AUD1 = US$0.79
1 March 2015
$AUD1 = US$0.82
30 June 2015
$AUD1 = US$0.90
Prepare journal entries for the purchase of the asset for the period 1 February 2014 to 30 June
2015 in accordance with AASB 121 and AASB 123.
Narrations are not required - round all calculations to the nearest dollar.
[Total for Question 2 = 10 marks]
1/2/ 14

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