Vitamin, Inc. is a U.S.-based manufacturer and wholesaler.  On 10/15/20x1, Vitamin made its first international sale.  They sold $450,000 of products to a non-U.S. customer.  Vitamin, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC.  To avoid a penalty, the foreign buyer must make payment to Vitamin by February 2, 20x2.  At the time of the sale, the FC/$ spot rate was FC1.97=$1   Vitamin, Inc. has a December 31 year-end.  At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1.   Required: For Vitamin, Inc., Give the journal entries for the 10/15/20x1 sale. Give the journal entries for the foreign currency sale at 12/31/ 20x1, when the company closes its books and prepares its financial statements. Give the journal entries for the receipt of payment on the sale on 2/2/20x2. At that date, the foreign currency spot rate was FC 2.00 = $1

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Vitamin, Inc. is a U.S.-based manufacturer and wholesaler.  On 10/15/20x1, Vitamin made its first international sale.  They sold $450,000 of products to a non-U.S. customer.  Vitamin, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC.  To avoid a penalty, the foreign buyer must make payment to Vitamin by February 2, 20x2.  At the time of the sale, the FC/$ spot rate was FC1.97=$1

 

Vitamin, Inc. has a December 31 year-end.  At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1.

 

Required: For Vitamin, Inc.,

  1. Give the journal entries for the 10/15/20x1 sale.
  2. Give the journal entries for the foreign currency sale at 12/31/ 20x1, when the company closes its books and prepares its financial statements.
  3. Give the journal entries for the receipt of payment on the sale on 2/2/20x2. At that date, the foreign currency spot rate was FC 2.00 = $1.
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