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1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar equivalent value of $6,600 to be paid on June 20. The exchange rates were May 1 June 201 1 yen $0.0070 1 yeni 0.0075 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $11,400, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were July 1 August 10 1 real 1 real- $0.20 0.22

1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar equivalent value of $6,600 to be paid on June 20. The exchange rates were May 1 June 201 1 yen $0.0070 1 yeni 0.0075 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $11,400, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were July 1 August 10 1 real 1 real- $0.20 0.22

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar equivalent value of $6,600 to be paid on June 20. The exchange rates were May 1 June 20 July 1 August 10 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $11,400, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were No 1 2 Required: a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3 4 Date May 01 June 20 1 yen 1 yen= July 01 August 10 1 real 1 real- $0.0070 0.0075 $0.20 0.22 Inventory (or Purchases) Accounts payable Accounts payable Cash Cash Accounts receivable Sales Accounts receivable General Journal 9 Ⓒ 00 → → 00 00 Debit 6,600 6,600 11,400✔ 11,400 Credit 6,600 6,600 11,400 11,400
Transcribed Image Text:1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar equivalent value of $6,600 to be paid on June 20. The exchange rates were May 1 June 20 July 1 August 10 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $11,400, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were No 1 2 Required: a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 3 4 Date May 01 June 20 1 yen 1 yen= July 01 August 10 1 real 1 real- $0.0070 0.0075 $0.20 0.22 Inventory (or Purchases) Accounts payable Accounts payable Cash Cash Accounts receivable Sales Accounts receivable General Journal 9 Ⓒ 00 → → 00 00 Debit 6,600 6,600 11,400✔ 11,400 Credit 6,600 6,600 11,400 11,400
b. Assume that the two transactions are denominated in the applicable local currency units of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the local currency units of the Japanese company (yen) and the Brazilian customer (real). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) No 1 2 3 4 5 6 7 Date May 01 June 20 June 20 June 20 July 01 August 10 August 10 Inventory (or Purchases) Accounts payable () Accounts payable () General Journal Foreign currency units (4) Foreign currency transaction loss Accounts payable ( Foreign currency transaction loss Accounts payable ( Accounts receivable (BRL) Sales Foreign currency units (4) Accounts receivable (BRL) Accounts receivable (BRL) Foreign currency transaction gain ●● ** ** * ●● • • ** XX Debit 6,600 7,071 471 ✪ 471 11,400 12,540 > 1,140 Credit 6,600 7,071 471 471 11,400 12,540 1.140 x
Transcribed Image Text:b. Assume that the two transactions are denominated in the applicable local currency units of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the local currency units of the Japanese company (yen) and the Brazilian customer (real). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to nearest whole number.) No 1 2 3 4 5 6 7 Date May 01 June 20 June 20 June 20 July 01 August 10 August 10 Inventory (or Purchases) Accounts payable () Accounts payable () General Journal Foreign currency units (4) Foreign currency transaction loss Accounts payable ( Foreign currency transaction loss Accounts payable ( Accounts receivable (BRL) Sales Foreign currency units (4) Accounts receivable (BRL) Accounts receivable (BRL) Foreign currency transaction gain ●● ** ** * ●● • • ** XX Debit 6,600 7,071 471 ✪ 471 11,400 12,540 > 1,140 Credit 6,600 7,071 471 471 11,400 12,540 1.140 x
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