On 10 June 20X0, Jackson Ltd an Australian company, purchased inventory for £100 000 from Pollock Ltd, a Welsh company. Under the contract of sale, property passes when the inventory was delivered to OzWale Air Cargo Ltd, this occurred on 20 June 20X0. The inventory was delivered to Jackson Ltd on 25 June 20X0. Jackson Ltd’s reporting period ends on 30 June and its functional currency is A$. Jackson paid the UK£ amount on 15 July 20X0. Some foreign exchange rates were:

\begin{array} { l l l } \text { 10 June 20X0 } & \mathrm { UK } £ 1.00 = & \mathrm { A } \$ 2.45 \\\text { 20 June 20X0 } & \mathrm { UK } £ 1.00 = & \mathrm { A } \$ 2.60 \\\text { 25 June 20X0 } & \mathrm { UK } £ 1.00 = & \mathrm { A } \$ 2.65 \\\text { 30 June 20X0 } & \mathrm { UK } £ 1.00 & = \mathrm { A } \$ 2.55 \\\text { 15 July 20X0 } & \mathrm { UK } £ 1.00 & = \mathrm { A } \$ 2.35\end{array}

-What FC exchange difference amounts will be included in Jackson's profit or loss statement?

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20X0

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20X1

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$
A)10,000 expense

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10,000 revenue
B)10,000 expense

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20,000 expense
C)10,000 revenue

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20,000 revenue
D)5,000 revenue

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20,000 revenue

An Entity's Functional Currency Is

Multiple Choice

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