On 1 June 20X0, Led Pty Ltd sold a machine to an overseas company for ¥3,000,000. Payment was received on 14 July 20X0. Led’s reporting date is 30 June, and its functional currency is A$. The risks and benefits relating to the machine transferred to the purchaser on delivery. The following exchange rate applied:
1 June 20X0 $\quad$$\quad$¥1.00 = $\quad$ A$0.20
30 June 20X0$\quad$$\quad$¥1.00 = $\quad$A$0.18
14 July 20X0$\quad$$\quad$¥1.00 = $\quad$A$0.19
-What was the foreign currency exchange difference on the transaction recognised by Led in the reporting period ending 30 June 20X1?
A)$30,000 FC exchange difference revenue
B)$30,000 FC exchange difference expense
C)$60,000 FC exchange difference revenue
D)$60,000 FC exchange difference expense

Question

On 1 June 20X0, Led Pty Ltd sold a machine to an overseas company for ¥3,000,000. Payment was received on 14 July 20X0. Led’s reporting date is 30 June, and its functional currency is A$. The risks and benefits relating to the machine transferred to the purchaser on delivery. The following exchange rate applied:
1 June 20X0 $\quad$$\quad$¥1.00	= $\quad$ A$0.20
30 June 20X0$\quad$$\quad$¥1.00	= $\quad$A$0.18
14 July 20X0$\quad$$\quad$¥1.00	= $\quad$A$0.19
-What was the foreign currency exchange difference on the transaction recognised by Led in the reporting period ending 30 June 20X1?
A)$30,000 FC exchange difference revenue
B)$30,000 FC exchange difference expense
C)$60,000 FC exchange difference revenue
D)$60,000 FC exchange difference expense

Quizplus · Accepted Answer

The foreign currency exchange difference is calculated as the difference between the exchange rate at the date of the transaction and the exchange rate at the reporting date. In this case, the exchange rate at the date of the transaction was ¥1.00 = A$0.20, and the exchange rate at the reporting date was ¥1.00 = A$0.18. Therefore, the foreign currency exchange difference is A$0.20 - A$0.18 = A$0.02. Since the exchange rate has decreased, this results in a foreign currency exchange difference revenue.

On 1 June 20X0, Led Pty Ltd Sold a Machine \quad

On 1 June 20X0, Led Pty Ltd Sold a Machine $\quad$