Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09:1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Description Date 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable + ✔ ✔ ÷ ✓ ÷ ✓ : ✔ x Debit 250,000 x 0✔ 10,000 x 0✔ 277,500✔ 0✓ 0✔ Credit 250,000 x 05 10,000 x 0✔ 277,500 x 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Journal entries for an accounts receivable denominated in Swiss Francs ($US strengthens and weakens)
Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment
is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis.
Assume the following exchange rates:
November 20 $1.12:1CHF
December 31 $1.09.1CHF
February 20 $1.11:1CHF
Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt
of payment February 20.
Description
Date
11/20 Accounts receivable
Sales
12/31 Foreign currency transaction loss
Accounts receivable
2/20 Cash
Accounts receivable
Accounts receivable
Debit
+ ✓ 250,000 x
+ ✓
✓
# ✓
0✓
10,000 x
0✓
÷ ✓
277,500✔
ooo
4
x
0✔
0✓
Credit
0✓
250,000 x
0✓
10,000 x
277,500 x
0x
Transcribed Image Text:Journal entries for an accounts receivable denominated in Swiss Francs ($US strengthens and weakens) Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09.1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Description Date 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable Debit + ✓ 250,000 x + ✓ ✓ # ✓ 0✓ 10,000 x 0✓ ÷ ✓ 277,500✔ ooo 4 x 0✔ 0✓ Credit 0✓ 250,000 x 0✓ 10,000 x 277,500 x 0x
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Knowledge Booster
Accounting for Foreign Exchange Transactions
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education