and
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
(a) ABC Co has a year end of 31 December 20X1 and uses the dollar ($) as its functional currency.
On 25 October 20X1 ABC Co buys goods from a Swedish supplier for Swedish Krona (SWK)
286,000.
Rates of exchange:
25 October 20X1 $1 = SWK 11.16
16 November 20X1 $1 = SWK 10.87
31 December 20X1 $1 = SWK 11.02
Required:
Show the accounting treatment for the above transactions if:
(a) A payment of SWK286,000 is made on 16 November 20X1.
(b) The amount owed remains outstanding at the year-end date.
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