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    Question

    On 1st Jan, X Ltd. purchased machinery from USA for

    $50,000 when exchange rate was ₹75/$ = ₹37,50,000. At balance sheet date (31st March), rate = ₹78/$. How should the machinery be valued?
    A ₹37,50,000 Correct Answer Incorrect Answer
    B ₹39,50,000 Correct Answer Incorrect Answer
    C ₹39,00,000 Correct Answer Incorrect Answer
    D ₹36,00,000 Correct Answer Incorrect Answer
    E None Correct Answer Incorrect Answer

    Solution

    AS 11 requires monetary items to be restated at closing rate. Hence $50,000 × 78 = ₹39,00,000. Exchange difference = 1,50,000 → P&L.

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