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On 5 September 2004 Russell Ltd Places an Order for €500,000

Question 50

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On 5 September 2004 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 2004. The goods are shipped on 5 October 2004 and are paid for on 5 November.
On 5 September 2004 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 2004. The goods are shipped on 5 October 2004 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) ? A) B) C) D) E) None of the given answers.
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) ?


A) On 5 September 2004 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 2004. The goods are shipped on 5 October 2004 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) ? A) B) C) D) E) None of the given answers.
B) On 5 September 2004 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 2004. The goods are shipped on 5 October 2004 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) ? A) B) C) D) E) None of the given answers.
C) On 5 September 2004 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 2004. The goods are shipped on 5 October 2004 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) ? A) B) C) D) E) None of the given answers.
D) On 5 September 2004 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 2004. The goods are shipped on 5 October 2004 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) ? A) B) C) D) E) None of the given answers.
E) None of the given answers.

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