Page 478 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Chaptter 25

Exxampple 2

A UUS entity seells apples to an entitty based inn Moldovia where thee currency is
the Moldoviann pound (MMol). The apples weree sold on 1 October 220X1 for MMol
2000,000 and wwere paid ffor in Febrruary 20X22.

Thee rate on 1 October 220X1 is USS$/Mol 1.555 (that is $1 = Mol 1.555).

Thee rate on 31 December 20X1 (thhe reportinng date) is US$/Mol 11.34 (that is
$1 == Mol 1.344).

Thee rate on 4 February 20X2 is USS$/1.41 (thhat is $1 = Mol 1.41)..
Reqquired:

Howw does thee US entitty accountt for the trransactionn in its fina ancial
stattements foor the yeaars ended 31 Decemmber 20X1 and 31 Deecember
20XX2?

468