On 1 September 2015 Antique Furniture Importers Acquires Furniture from a Supplier

question 7

Multiple Choice

On 1 September 2015 Antique Furniture Importers acquires furniture from a supplier in Europe.The furniture is shipped f.o.b.from Brussels on 1 September 2015.The cost of the furniture is €500 000.The amount has not been paid at 30 September 2015.Exchange rates are as follows: $$\begin{array} { | l | l | } \hline 1 \text { September } 2015 & \text { A\$1.00 } = € 0.52 \\\hline 30 \text { September } 2015 & \text { A\$1.00 } = € 0.58 \\\hline\end{array}$$ What is the amount payable at 1 September and 30 September 2015in Australian dollars (rounded to the nearest whole A$) ?
Did the Australian dollar strengthen or weaken?

• A)
• \[\begin{array} { | l | l | }
• \hline 1 \text { September } 2015 & \$ 260000 \\
• \hline 30 \text { September } 2015 & \$ 290000 \\
• \hline
• \end{array}\] The Australian dollar weakened.
• B)
• \[\begin{array} { | l | l | }
• \hline \text { 1 September } 2015 & \$ 1041667 \\
• \hline 30 \text { September } 2015 & \$ 1190476 \\
• \hline
• \end{array}\] The Australian dollar strengthened.
• C)
• \[\begin{array} { | l | l | }
• \hline \text { 1 September } 2015 & \$ 961538 \\
• \hline 30 \text { September } 2015 & \$ 862069 \\
• \hline
• \end{array}\] The Australian dollar strengthened.
• D)
• \[\begin{array} { | l | l | }
• \hline 1 \text { September } 2015 & \$ 240000 \\
• \hline 30 \text { September } 2015 & \$ 210000 \\
• \hline
• \end{array}\] The Australian dollar weakened.

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Definitions:

Financial Statement

An orderly enumeration of monetary activities and financial health of an entity, be it a business, individual, or something else.

Financial Statement

A comprehensive report detailing a company's financial performance, position, and cash flows over a specific period.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance based on accounting principles.

Drawee

In financial terms, this is the entity upon which a cheque or draft is drawn and is responsible for paying the amount.