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Question 1 (10 marks) 1a) On 1 May 2020 Harry's Plastics Ltd acquires goods from...

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Question 1 (10 marks) 1a) On 1 May 2020 Harry's Plastics Ltd acquires goods from a supplier in the US. The goods are shipped f.o.b.from the United States on 1 May 2020. The cost of the goods is US$1 500 000. The amount has not been paid at period end, 30 June 2020. Exchange rates are as follows: 1 May 2020 30 June 2020 A$1.00 - US$0.59 A$1.00 = US$0.52 Required: Prepare the journal entries that are required at transaction date and reporting date (rounded to the nearest whole A$). (5 marks) 1b) On 1 July 2016 McGrath Ltd enters into an arrangement with a Hong Kong bank to borrow $HK1 500 000. The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 7 per cent. The exchange rate information is: 1 July 2016 AS1 = SHK4.25 30 June 2017 AS1 = SHK3.50 30 June 2018 A$1 = SHK4.50 Required: Prepare the journal entries that are required in McGrath Ltd's books for 1 July 2016 and 30 June 2017 and 30 June 2018 in accordance with AASB 121 (rounded to the nearest whole A$)

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