On 10 July 2022, Reef Ltd enters into a binding agreement with a US manufacturer who will construct for Reef Ltd a new mine tunnel boring machine for an agreed price of US$8,000,000. From the date of signing the agreement, Reef Ltd has legal title and control of the machine. On 12 July 2023, the machine is completed and shipped from San Francisco. At the same time (which is before Reef Ltd has finalised its 30 June 2023 financial reports) the US manufacturer also informed you that they were applying a clause in the contract which allowed them to charge for increased costs of materials and hence, increased the contract amount by US$500,000. Payment of the total of US$8,500,000 was due 30 days after shipment and on 12 August 2023 Reef Ltd makes full payment. As noted, Reef Ltd’s financial year ends on 30 June. The exchange rates are as follows:

• 10 July 2022 A$1 = US$0.67
• 30 June 2023 A$1 = US$0.72
• 12 July 2023 A$1 = US$0.65
• 12 August 2023 A$1 = US$0.64
Required:
a) Determine whether the US$500,000 increase in the contract price would be an “adjusting event” or a “non-adjusting event”. Provide your reasoning.
b) Prepare all required journal entries (including narrations) for Reef Ltd to record the above movements in the foreign currency for the year ended 30 June 2023 and 30 June 2024