ZuoTi.Pro
Question

On 1 March 2010 Lima Ltd enters into a binding agreement with a New Zealand company,...

On 1 March 2010 Lima Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand company to construct an item of machinery for Lima Ltd. The cost of the machinery is NZ$1 500 000. The machinery is completed on 1 June 2010 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2010, which is also Lima Ltd’s balance date. The exchange rates at the relevant dates are: 1 March 2010 1 June 2010 30 June 2010 A$1.00 = NZ$1.20 A$1.00 = NZ$1.30 A$1.00 = NZ$1.25 Required: [use the space provided below] Provide the required journal entries of Lima Ltd for the year ended 30 June 2010.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Date books of Lima Ltd. A$ A$
01-Jun-10 Machinery A/C Dr. 1,153,846.15
To New Zeland Company Cr. 1,153,846.15
(being machine purchased NZ $ 1500000)
30-Jun-10 Loss on Foreign Exchange (P&L) Dr. 46,153.85
To New Zeland Company Cr. 46,153.85
(being foreign currency monetary item revalued NZ $ 1500000)
0 0
Add a comment
Know the answer?
Add Answer to:
On 1 March 2010 Lima Ltd enters into a binding agreement with a New Zealand company,...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Part A (14 marks) Company A issues 2000 convertible notes on 1 July 2012. The notes...

    Part A (14 marks) Company A issues 2000 convertible notes on 1 July 2012. The notes have a three-year term and are issued at par with a face value of $1000 per note, giving total proceeds at the date of issue of $2 million. The notes pay interest at 6% annually in arrears. The holder of each note is entitled to convert the note into 250 ordinary shares of Company A at any time up to maturity. When the notes...

  • Show calculation workout to support understanding On 12th April 2018 Pit Bull Ltd enters into a...

    Show calculation workout to support understanding On 12th April 2018 Pit Bull Ltd enters into a contract with a New Zealand company, Secure Ltd, whereby Secure Ltd will build a printing machine for Pit Bull Ltd. The machine has been priced at NZ$850000 The printing machine is completed on 14th June 2019 and shipped FOB Wellington on that date. The debt remains unpaid at 30th June 2019, which is the end of Pit Bulls Ltd's financial reporting period The exchange...

  • On 5 June 2014 Perth Ltd purchased goods on credit from a supplier in UK. The...

    On 5 June 2014 Perth Ltd purchased goods on credit from a supplier in UK. The goods are shipped FOB UK on that date. The cost of the goods is UK£250 000. The debt remains unpaid at 30 June 2014, which is also Perth Ltd’s reporting date. The exchange rates at the relevant dates are: 5 June 2014 A$1.00 = UK£0.46 30 June 2014 A$1.00 = UK£0.44 Required: [use the space provided below] Provide the required journal entries of Perth...

  • Question 7 Banjo Ltd acquired 100% of Wellington Ltd on 1 July 2018. The balance sheet of Wellington Ltd on that date wa...

    Question 7 Banjo Ltd acquired 100% of Wellington Ltd on 1 July 2018. The balance sheet of Wellington Ltd on that date was as follows: Balance sheet at 1 July 2018 NZ$ NZ$ Machinery at cost 560,000 Share capital 400,000 Investment property 400,000 General reserve 200,000 Receivables 100,000 Retained earnings 600,000 Cash 140,000 1,200,000 1,200,000 The balance sheet of Wellington Ltd as at 30 June 2019 is as follows: Balance sheet as at 30 June 2019 NZ$ NZ$ Machinery —...

  • Acumen Ltd enters into a 5-year agreement to lease an item of machinery from Ascor Ltd...

    Acumen Ltd enters into a 5-year agreement to lease an item of machinery from Ascor Ltd on 1 July 2019. Acumen Ltd incurred costs of $3928 in setting up the lease agreement. The machinery has a fair value of $492 000 at the inception of the lease and it is expected to have an economic life of 6 years, after which time it will have a residual value of $45 000. The lease agreement details are as follows. All insurance...

  • On 1 July 2032, Kiwi Ltd, a company based in Auckland, New Zealand, acquired all of...

    On 1 July 2032, Kiwi Ltd, a company based in Auckland, New Zealand, acquired all of the issued shares of Seattle Ltd, an American software development company based in Washington State. The trial balance in US dollars) for Seattle Ltd for the last two years appears below: Y/E 30/06/33 Deblt Credit 225,000 50,000 350,000 1,025,000 $ 2,300,000 300,000 1,800,000 325,000 200,000 800,000 500,000 825,000 1,200,000 1,800,000 500,000 300,000 500,000 4,000,000 2,100,000 100,000 125,000 100,000 712,500 Y/E 30/06/32 Deblt Credit 400,000...

  • 1) Sussex Ltd Advisory Sussex Ltd is a company that provides consulting services for firms in...

    1) Sussex Ltd Advisory Sussex Ltd is a company that provides consulting services for firms in the wine making industry. On 1 March 2015 Sussex Ltd receives a non-refundable upfront fee of $120,000 in cash from Harrington Ltd. Under the agreement with Harrington Ltd, Sussex Ltd must provide on-going advice services until 1 March 2016. Sussex Ltd team of advisers that works on the Harrington advisory engagement is paid $5,000 a month. Sussex Ltd has a financial year-end date of...

  • Tyson Ltd enters into a non-cancellable five-year lease agreement with Benson Ltd on 1 July 2018....

    Tyson Ltd enters into a non-cancellable five-year lease agreement with Benson Ltd on 1 July 2018. The lease is for an item of machinery that, at the inception of the lease, has a fair value of $369 824. The machinery is expected to have an economic life of six years, after which time it will have an expected salvage value of $60 000. There is a bargain purchase option that Tyson Ltd will be able to exercise at the end...

  • Turnbull Ltd has entered into an agreement to lease a machine to Abbott Ltd. Details are:...

    Turnbull Ltd has entered into an agreement to lease a machine to Abbott Ltd. Details are: Length of lease 5 years Commencement date 1 July 2013 Annual lease payment, payable 30 June each year commencing 30 June 2014 $8 000 Fair value of the Machinery at 1 July 2013 $34 797 Estimated economic life of the Machinery 8 years Estimated residual value of the Machinery at the end of its economic life $2 000 Residual value at the end of...

  • Above trarsdLIun.L REQUIRED Prepare the journal entries for Possum Ltd to account for the a UK su...

    above trarsdLIun.L REQUIRED Prepare the journal entries for Possum Ltd to account for the a UK supplier. The goods will be purchased FOB Liverpool. A decision is made to take out a foreign exch forward-rate contract for UK£1.5 million on 1 March 2018 with The Bank in which The Bank agrees to supply Ka Ltd with UKS1.5 million on 1 August 2018. The goods are shipped on 1 June 2018 and are paid f 2018. 15. On 1 March 2018...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT