On 1 February 2014,Morinda Ltd completes a binding agreement to purchase a hydraulic lift from a manufacturer located in Germany.The cost of the equipment is €150 000.The construction of the lift is completed on 30 May 2014,and it is considered to be a qualifying asset according to AASB 123.The amount owing has not been paid by reporting date 30 June 2014.The following is information about the exchange rates: $$\begin{array} { | l | l | }
\hline 1 \text { February } 2014 & \text { A\$1 } = € 0.60 \
\hline 30 \text { May } 2014 & \text { A\$1 } = € 0.56 \
\hline 30 \text { June } 2014 & \text { A\$1 } = € 0.46 \
\hline
\end{array}$$ What entries are required to record the transaction and subsequent events in accordance with AASB 121 (rounded to the nearest whole A$)?

Question

On 1 February 2014,Morinda Ltd completes a binding agreement to purchase a hydraulic lift from a manufacturer located in Germany.The cost of the equipment is €150 000.The construction of the lift is completed on 30 May 2014,and it is considered to be a qualifying asset according to AASB 123.The amount owing has not been paid by reporting date 30 June 2014.The following is information about the exchange rates: $$\begin{array} { | l | l | } 
\hline 1 \text { February } 2014 & \text { A\$1 } = € 0.60 \
\hline 30 \text { May } 2014 & \text { A\$1 } = € 0.56 \
\hline 30 \text { June } 2014 & \text { A\$1 } = € 0.46 \
\hline
\end{array}$$ What entries are required to record the transaction and subsequent events in accordance with AASB 121 (rounded to the nearest whole A$)?

Quizplus · Accepted Answer

The Answer of On 1 February 2014,Morinda Ltd completes a binding agreement to purchase a hydraulic lift from a manufacturer located in Germany.The cost of the equipment is €150 000.The construction of the lift is completed on 30 May 2014,and it is considered to be a qualifying asset according to AASB 123.The amount owing has not been paid by reporting date 30 June 2014.The following is information about the exchange rates: $$\begin{array} { | l | l | } 
\hline 1 \text { February } 2014 & \text { A\$1 } = € 0.60 \
\hline 30 \text { May } 2014 & \text { A\$1 } = € 0.56 \
\hline 30 \text { June } 2014 & \text { A\$1 } = € 0.46 \
\hline
\end{array}$$ What entries are required to record the transaction and subsequent events in accordance with AASB 121 (rounded to the nearest whole A$)?

On 1 February 2014,Morinda Ltd Completes a Binding Agreement to Purchase