FUND.ACCT.PRIN.(LOOSELEAF)-W/CONNECT
25th Edition
ISBN: 9781264218103
Author: Wild
Publisher: MCG
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Chapter 15A, Problem 7PSA
1.
To determine
Introduction:
To record: The journal entries.
2.
To determine
Introduction: Journal entry is the first step of accounting to record day-to-day transactions that a business performs. It helps in further preparing financial statements at the end of the period to assess the financial position of the business.
The foreign exchange gain or loss.
3.
To determine
Introduction: Journal entry is the first step of accounting to record day-to-day transactions that a business performs. It helps in further preparing financial statements at the end of the period to assess the financial position of the business.
The action required.
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Subject :- Accounting
Recording Export Transactions Daisy Brands, a U.S. company, sells items abroad. Daisy prices
many of these transactions in the currency of the customer. Following are four such transactions made in
the last accounting period, plus the direct exchange rates for each date:
Country Amount Currency
Spot rate at
sale
Spot rate
at collection
Argentina . . . . . . . . . . . . . . . . . . . . . . 250,000 Peso $0.056 $0.049
Canada . . . . . . . . . . . . . . . . . . . . . . . . 400,000 Dollar 0.732 0.713
India . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 Rupee 0.016 0.018
South Africa . . . . . . . . . . . . . . . . . . . . 100,000 Rand 0.074 0.077
Required
Prepare the journal entries made by Daisy Brands to record the above sale and collection transactions
2 XYZ Company sells goods to a foreign customer on June 8. Payment of 3,000,000 foreign currency units (FC) is due in one month. June 30 is XYZ Company’s fiscal year-end. The following exchange rates were in effect during the period:
June 8 Spot rate $1.10
June 8 30 day forward rate $1.15
June 30 Spot rate $1.14
July 8 Spot rate $1.20
A For what amount should XYZ Accounts Receivable be debited on June 8
B How much foreign exchange gain or loss should XYZ record on June 30
Chapter 15A Solutions
FUND.ACCT.PRIN.(LOOSELEAF)-W/CONNECT
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