On 5 September 2014 Russell Ltd places an order for €500 000 of inventory from a Swedish supplier.The terms for the purchase of the goods are that they are f.o.b.shipping point and they are to be paid for on 5 November.The financial controller of Russell Ltd enters into a forward-exchange contract on 5 September and designates it as a hedge for the purchase.The forward-exchange contract is for €500 000 to be supplied by the bank on 5 November 2014.The goods are shipped on 5 October 2014 and are paid for on 5 November. What are the journal entries to record the above transactions from 5 September through to 5 November in accordance with AASB 121 (rounded to the nearest whole A$)?

Question

On 5 September 2014 Russell Ltd places an order for €500 000 of inventory from a Swedish supplier.The terms for the purchase of the goods are that they are f.o.b.shipping point and they are to be paid for on 5 November.The financial controller of Russell Ltd enters into a forward-exchange contract on 5 September and designates it as a hedge for the purchase.The forward-exchange contract is for €500 000 to be supplied by the bank on 5 November 2014.The goods are shipped on 5 October 2014 and are paid for on 5 November.  What are the journal entries to record the above transactions from 5 September through to 5 November in accordance with AASB 121 (rounded to the nearest whole A$)?

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The Answer of On 5 September 2014 Russell Ltd places an order for €500 000 of inventory from a Swedish supplier.The terms for the purchase of the goods are that they are f.o.b.shipping point and they are to be paid for on 5 November.The financial controller of Russell Ltd enters into a forward-exchange contract on 5 September and designates it as a hedge for the purchase.The forward-exchange contract is for €500 000 to be supplied by the bank on 5 November 2014.The goods are shipped on 5 October 2014 and are paid for on 5 November.  What are the journal entries to record the above transactions from 5 September through to 5 November in accordance with AASB 121 (rounded to the nearest whole A$)?

On 5 September 2014 Russell Ltd Places an Order for €500