Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff Inventory and purchases are as follows: Inventory, January 1, 20X7 Purchases during 20x7 Inventory, December 31, 20X7 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20X6 January 1, 20X7 Average during 20x7 Fourth quarter of 20x7 December 31, 20X7 € 226,000 866,000 194,000 €1-$1.29015 €1-$1.32030 €151.39655 €1-$1.45000 € 1$ 1.47280 Required: a. Show the remeasur ent of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. Note: Round your intermediate calculations and final answer to nearest dollar amount. b. Show the translation of cost of goods sold for 20X7, assuming that the euro is the functional currency. Note: Round your final answer to nearest dollar amount. a. Cost of goods sold b. Cost of goods sold Answer is complete but not entirely correct. $ 1,254,102 $ 1,219,686

Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff Inventory and purchases are as follows: Inventory, January 1, 20X7 Purchases during 20x7 Inventory, December 31, 20X7 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20X6 January 1, 20X7 Average during 20x7 Fourth quarter of 20x7 December 31, 20X7 € 226,000 866,000 194,000 €1-$1.29015 €1-$1.32030 €151.39655 €1-$1.45000 € 1$ 1.47280 Required: a. Show the remeasur ent of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. Note: Round your intermediate calculations and final answer to nearest dollar amount. b. Show the translation of cost of goods sold for 20X7, assuming that the euro is the functional currency. Note: Round your final answer to nearest dollar amount. a. Cost of goods sold b. Cost of goods sold Answer is complete but not entirely correct. $ 1,254,102 $ 1,219,686

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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[The following information applies to the questions displayed below.] Autumn Company began the month of October with inventory of $25,000. The following inventory transactions occurred during the month: The company purchased inventory on account for $37,000 on October 12. Terms of the purchase were 2/10, n/30. Autumn uses the net method to record purchases. The inventory was shipped f.o.b. shipping point and freight charges of $600 were paid in cash. On October 31, Autumn paid for the inventory purchased on October 12 During October inventory costing $19,500 was sold on account for $30,000. It was determined that inventory on hand at the end of October cost $42,360. Assuming Autumn Company uses a periodic inventory system, prepare journal entries for the above transactions including the adjusting entry at the end of October to record cost of goods sold. Autumn considers purchase discounts lost as part of interest expense.
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