Required A Required B Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Date General Journal 1 December 1, 20X1 Inventory (or Purchases) Accounts payable (SFr) Debit Credit 10,500 10,500 2 December 31, 20X Accounts payable (SFr) 600 Foreign currency transaction gain 600 3 January 15, 20X2 Accounts payable (SFr) 4 Cash January 15, 20X2 Foreign currency transaction gain Accounts payable (SFr) 5 January 15, 20X2 Inventory (or Purchases) Accounts payable (SFr) < Required A Required B > 10,200 10,200 300 300 10,500 10,500

Cornerstones of Financial Accounting
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Author:Jay Rich, Jeff Jones
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Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 44E: Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual...
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2)

On December 1, 20X1, Rone Imports, a U.S. company, purchased clocks from Switzerland for 15,000 francs (SFr) to be paid on January 15, 20X2. Rone’s fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are

December 1, 20X1 1 SFr = $0.70
December 31, 20X1 1 SFr = 0.66
January 15, 20X2 1 SFr = 0.68

b. Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement.

 

  • 1
    Record the purchase of the clocks.
     
  • 2
    Record the revaluation of the foreign currency payable to the U.S. dollar equivalent value.
     
  • 3
    Record the revaluation of accounts payable to the current U.S. dollar equivalent.
     
  • 4
    Record the purchase of Swiss francs.
     
  • 5
    Record the settlement of the payables.

 

Required A
Required B
Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
No
Date
General Journal
1
December 1, 20X1 Inventory (or Purchases)
Accounts payable (SFr)
Debit
Credit
10,500
10,500
2
December 31, 20X Accounts payable (SFr)
600
Foreign currency transaction gain
600
3
January 15, 20X2 Accounts payable (SFr)
4
Cash
January 15, 20X2 Foreign currency transaction gain
Accounts payable (SFr)
5
January 15, 20X2 Inventory (or Purchases)
Accounts payable (SFr)
< Required A
Required B >
10,200
10,200
300
300
10,500
10,500
Transcribed Image Text:Required A Required B Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlement. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Date General Journal 1 December 1, 20X1 Inventory (or Purchases) Accounts payable (SFr) Debit Credit 10,500 10,500 2 December 31, 20X Accounts payable (SFr) 600 Foreign currency transaction gain 600 3 January 15, 20X2 Accounts payable (SFr) 4 Cash January 15, 20X2 Foreign currency transaction gain Accounts payable (SFr) 5 January 15, 20X2 Inventory (or Purchases) Accounts payable (SFr) < Required A Required B > 10,200 10,200 300 300 10,500 10,500
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