Advanced Accounting
7th Edition
ISBN: 9781119373209
Author: JETER, Paul K. Chaney
Publisher: WILEY
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Chapter 12, Problem 1E
To determine
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Selco, a U.S. Company, imports and exports tools, shop equipment, and industrial construction supplies. The company uses a periodic inventory system. During April the company entered into the following transactions. All rate quotations are direct exchange rates.
April
3
Purchased power tools from a wholesaler in Japan, on account, at an invoice cost of 1,710,000 yen. On this date the exchange rate for the yen was $0.0076.
5
Sold hand tools on credit that were manufactured in the U.S. to a retail outlet located in West Germany. The invoice price was $3,300. The exchange rate for marks was $0.5962.
9
Sold electric drills on account to a retailer in New Zealand. The invoice price was 16,700 U.S. dollars and the exchange rate for the New Zealand dollar was $0.5891.
11
Purchased drill bits on account from a manufacturer located in Belgium. The billing was for 801,282 francs. The exchange rate for francs was $0.0312.
16
Paid 1,010,000 yen on account to the…
IJR Corp. imports cheese for distribution in the United States (US). On April 1, the
corporation purchased cheese costing 100,000 Euro. Payment is due in Euro on
August 1. The spot rate on April 1 was $1.20 per Euro, and on August 1, it was $1.25
per Euro.
Determine the following:
1.
2.
The company's liabilities in US Dollars prior to payment
The amount of payment in US Dollars on August 1
Briefly discuss implications of the transaction.
Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2019 and 2020. 2019 Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.1043 on this day. July 21 Sold merchandise on credit to Sumito Corp. in Japan. The price of 1.5 million yen is to be paid 120 days from the date of sale. The exchange rate for yen is $0.0094 on this day. Oct. 14 Sold merchandise for 19,000 pounds to Smithers Ltd. of Great Britain, payment in full to be received in 90 days. The exchange rate for pounds is $1.4566 on this day. Nov. 18 Received Sumito’s payment in yen for its July 21 purchase and immediately exchanged the yen for dollars. The exchange rate for yen is $0.0092 on this day. Dec. 20 Sold merchandise for 17,000 ringgits to Hamid Albar of Malaysia, payment in full to be received in 30 days. On this day, the exchange rate for ringgits is $0.4501. Dec. 31 Recorded adjusting entries…
Chapter 12 Solutions
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- On November 6, 20X7, Zebra Corporation purchased merchandise from an unaffiliated foreign company for 50,000 units of the foreign company's local currency. On that date, the spot rate was $1.259. Zebra paid the bill in full three months later when the spot rate was $1.258. The spot rate was $1.255 on December 31, 20X7. What amount should Zebra report as a foreign currency transaction gain in its income statement for the year ended December 31, 20X7? O $50 O $150 O $0 O $200 (1arrow_forwardVoltac Corporation (a U.S.-based company) has the following import/export transactions denominated in Mexican pesos in 2020: Bought inventory costing 116,000 pesos on credit. March 1 May 1 August 1 September 1 Sold 60 percent of the inventory for 96,000 pesos on credit. Collected 78,000 pesos from customers. Paid 68,000 pesos to suppliers. Currency exchange rates for 1 peso for 2020 are as follows: Date March 1 May 1 August 1 September 1 December 31 Assume that all receipts were converted into dollars as soon as they were received. For each of the following accounts, what amount will Voltac report on its 2020 financial statements? a b C d Inventory Cost of goods sold Sales Accounts receivable U.S. Dollar per Peso $ 0.25 0.26 0.27 0.28 0.29 e Accounts payable f Casharrow_forwardThe U.S Company, In the month of January 15 sold machinery on account to a retailer Australia. The invoice price was 250,000 US dollars and the exchange rate for the Australia dollar was $0.576. Select one:a. Cash A/c Dr 144,000$Sales A/c Cr 144,000$b. Cash A/c Dr 250,000$Sales A/c Cr 250,000$c. Accounts Receivable 250,000$ Sales 250,000$ d. Accounts receivable A/c Dr 144,000$Sales A/c Cr 144,000$arrow_forward
- Harris Incorporated had the following transactions: On May 1, Harris purchased parts from a Japanese company for a U.S. dollar–equivalent value of $7,000 to be paid on June 20. The exchange rates were May 1 1 yen = $0.0070 June 20 1 yen = 0.0075 On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,400, to be received on August 10. Brazil’s local currency unit is the real. The exchange rates were July 1 1 real = $0.20 August 10 1 real = 0.22 Required: Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. Assume that the two transactions are denominated in the applicable LCUs of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the LCUs of the Japanese company (yen) and the Brazilian customer (real).arrow_forwardClark Co., a U.S. corporation, sold inventory on December 1, 2021, with payment of 12,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: Spot rate: $1.831 Dec. 31 Spot rate: $1.976 Jan. 30 Spot rate: $1.768 Dec. 1 For what amount should Sales be credited on December 1? Multiple Choice $21,216. $21,972. $23,712. $19,760. $18,310.arrow_forwardVoltac Corporation (a U.S.-based company) has the following import/export transactions denominated in Mexican pesos in 2020: March 1 Bought inventory costing 113,000 pesos on credit. May 1 August 1 Sold 60 percent of the inventory for 93,000 pesos on credit. Collected 76,500 pesos from customers. September 1 Paid 66,500 pesos to suppliers. Currency exchange rates for 1 peso for 2020 are as follows: Date March 1 May 1 August 1 September 1 December 31 с Assume that all receipts were converted into dollars as soon as they were received. For each of the following accounts, what amount will Voltac report on its 2020 financial statements? a b d Inventory Cost of goods sold Sales U.S. Dollar per Peso $ 0.22 0.23 0.24 0.25 0.26 Accounts receivable e Accounts payable f Casharrow_forward
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