On 1 May 2014 Moorooba Exporters Plc,an English company,sells inventory to a customer in Singapore.The inventory is sold for $S300 000 and payment is not due until 30 July 2014.The reporting date for Moorooba Exporters Plc is 30 June.The exchange rate information is:
1 May 2014 £1 = $S0.95
30 June 2014 £1 = $S0.95
30 July 2014 £1 = $S0.95
Moorooba Exporters uses a perpetual inventory system.What journal entries are required in Moorooba Exporters Plc's books to record the transaction,adjustments at the end of the period and settlement in accordance with IAS 21 (rounded to the nearest whole pound)?
What is the realised gain/loss on the monetary item?
A)

1 \text { May } 2014

\begin{array}{|l|l|r|l|}\hline\mathrm{Dr} & \text { Accounts receivable } & 330000 & \\\hline \mathrm{Cr} & \text { Inventory } & & 330000\\\hline\end{array}

30 \text { June } 2014

\begin{array}{|l|l|l|l|}\hline \mathrm{Dr} & \text { Accounts receivable } & 375000 & \\\hline \mathrm{Cr} & \text { Inventory } & & 375000 \\\hline\end{array}

30 \text { July } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Cash } & 285000 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & & 285000 \\\hline\end{array}

Realised loss £45 000
B)

1 \text { May } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Accounts receivable } & 333333 & \\\hline \mathrm{Cr} & \text { Inventory } & & 333333 \\\hline\end{array}

30 \text { June } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Foreign currency loss } & 66667 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & & 66667 \\\hline\end{array}

30 \text { July } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Accounts receivable } & 114286 & \\\hline \mathrm{Cr} & \text { Foreign currency gain } & & 114286 \\\hline \\\hline \mathrm{Dr} & \text { Cash } & 285714 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & & 285714 \\\hline\end{array}

Realised loss £66 667
C)

1 \text { May } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Accounts receivable } & 272727 & \\\hline \mathrm{Cr} & \text { Inventory } & & 272727 \\\hline\end{array}

30 \text { June } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Foreign currency loss } & 32727 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & & 32727 \\\hline\end{array}

30 \text { July } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Accounts receivable } & 75789 & \\\hline \mathrm{Cr} & \text { Foreign currency gain } & & 75789 \\\hline \\\hline \mathrm{Dr} & \text { Cash } & 315789 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & & 315789 \\\hline\end{array}

Realised gain £43 062
D)

1 \text { May } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Sales } & 330000 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & & 330000 \\\hline\end{array}

30 \text { June } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Accounts receivable } & 90000 & \\\hline \mathrm{Cr} & \text { Foreian currency loss } & & 90000 \\\hline\end{array}

30 \text { June } 2014

\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Foreign currency gain } & 75789 & \\\hline \mathrm{Cr} & \text { Accounts receivable } & 75789 \\\hline \\\hline \mathrm{Dr} & \text { Accounts receivable } & 315789 & \\\hline \mathrm{Cr} & \text { Cash } & & 315789 \\\hline\end{array}

Realised gain £90 000

IAS 21 Requires That Foreign Currency Monetary Items Outstanding at Reporting

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