Accounting for foreign currency - denominated receivables and payables - multiple years The accounts of Lin, a U.S. corporation, show $81,300 accounts receivables and $38,900 accounts payable at December 31, 2016, before adjusting entries are made. An analysis of the balances reveals the following Accounts Receivable Receivable Dominated in US dollars $28,500 Receivable Dominated in 20,000 Swedish krona $11,800 Receivable Dominated in 25,000 British pounds $41,000 Total $81,300 Accounts Payable Payable dominated in US dollars $6,850 Payable dominated in 10,000 canadian dollars $7,600 Payable dominated in 15,000 British pounds $24,450 Total $38,900 Current exchange rates for Swedish krona, British pounds, and Canadian dollars at December 31, 2016 are $0.52, $1.65, and $0.70. Required: 1. determine the net exchange gain or loss that should be reflected in Lin's income statement for 2016 from year-end exchange adjustments. 2. determine the amounts at which the accounts receivable and accounts payable should be included in Lin's December 31,2016 balance sheet. 3. prepare journal entries to record collection of the receivables in 2017 when the spot rates for Swedish krona and British pounds are $0.55 and $1.63 respectively. 4. prepare journal entries to record settlement of accounts payable in 2017 when the spot rates for Canadian dollars and British pounds are $0.69 and $1.62 respectivelty.
Accounting for foreign currency - denominated receivables and payables - multiple years
The accounts of Lin, a U.S. corporation, show $81,300 accounts receivables and $38,900 accounts payable at December 31, 2016, before
Receivable Dominated in US dollars $28,500
Receivable Dominated in 20,000 Swedish krona $11,800
Receivable Dominated in 25,000 British pounds $41,000
Total $81,300
Accounts Payable
Payable dominated in US dollars $6,850
Payable dominated in 10,000 canadian dollars $7,600
Payable dominated in 15,000 British pounds $24,450
Total $38,900
Current exchange rates for Swedish krona, British pounds, and Canadian dollars at December 31, 2016 are $0.52, $1.65, and $0.70.
Required: 1. determine the net exchange gain or loss that should be reflected in Lin's income statement for 2016 from year-end exchange adjustments.
2. determine the amounts at which the accounts receivable and accounts payable should be included in Lin's December 31,2016
3. prepare
4. prepare journal entries to record settlement of accounts payable in 2017 when the spot rates for Canadian dollars and British pounds are $0.69 and $1.62 respectivelty.
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