Question

In: Accounting

An American company sells merchandise on account to a Swiss company for CHF 50,000 on 1/12/2019...

An American company sells merchandise on account to a Swiss company for CHF 50,000 on 1/12/2019 when the rate was 1 CHF = 0.9 USD. On 31/12/2019 the rate was 1 CHF = 0.96 USD. On 25/1/2020 the Swiss company pays its obligation to the US company (the rate was 1 CHF = 1.01 USD), which keeps the foreign cash it and converts the amount to US dollars on 10/2/2020, when the rate was 1 CHF = 0.99 USD. Required: Provide the journal entries on each of the above mentioned dates (Note: CHF means Swiss franc). NOTE: IF YOU CANNOT CLEARLY WRITE THE JOURNAL ENTRIES LIKE YOU WOULD ON A PAPER EXAM, PLEASE MENTION dr OR cr NEAR EACH ACCOUNT IN THE JOURNAL ENTRY AS APPROPRIATE.

Solutions

Expert Solution

Facts of the case
Domestic Currency USD
Foreign Currency Swiss Franc
As Being American Company material sold for CHF 50000
01-12-2019 Transaction Date 1 CHF = 0.9 USD
31-12-2019 Clsoing rate 1 CHF = 0.96 USD
25-01-2020 Pay obliagtion 1 CHF = 1.01 USD
Converts the foreign cash on
10-02-2020 1 CHF = 0.99 USD
Date Accounts Description Dr Cr
01-12-2019 Account Receivable A/c Dr.        55,556
To Sale A/c    55,556
( Being Receivable recorded at 0.9 USD)
31-12-2019 Exchange Loss A/c 3472
To Account Receivable 3472
( Being transactional loss booked)
25-01-2020 Foreign Exchange Currency A/c 49505
Exchange Loss A/c 2578
To Account Receivable 52083
( Being receivable settled)
10-02-2020 Cash A/c Dr. 50505
To foreign Exchange Currency A/c 49505
Exchange Gain A/c 1000
( Being Foreign currency settled)

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

An American company sells merchandise on account to a Swiss company for CHF 50,000 on 1/12/2019...
An American company sells merchandise on account to a Swiss company for CHF 50,000 on 1/12/2019 when the rate was 1 CHF = 0.9 USD. On 31/12/2019 the rate was 1 CHF = 0.96 USD. On 25/1/2020 the Swiss company pays its obligation to the US company (the rate was 1 CHF = 1.01 USD), which keeps the foreign cash it and converts the amount to US dollars on 10/2/2020, when the rate was 1 CHF = 0.99 USD. Required:...
On January 1, 2019, Fleming Company borrowed $50,000 cash from First American Bank by issuing a...
On January 1, 2019, Fleming Company borrowed $50,000 cash from First American Bank by issuing a one year 6% note. The principal and interest will be repaid by making one annual payment on December 31, 2019. The amount of the payment to the bank on December 31, 2019 for the principal and interest is: Group of answer choices $50,000 $80,000 $53,000 $50,300 2. Gem's Jewelry made a cash sale of merchandise amounting to $2,500 to a customer in Tyler, Texas...
Towbin Products sells merchandise on credit for $7,000 on December 1, 2019. The merchandise cost Towbin...
Towbin Products sells merchandise on credit for $7,000 on December 1, 2019. The merchandise cost Towbin $4,900 (70% of the selling price). Towbin estimates that returns and allowances will amount to 4% of sales. On December 22, 2019, a customer returns for credit merchandise originally sold on December 1 for $200. Assume that Towbin uses a perpetual inventory system. Prepare the journal entries to record the preceding sale and the return of merchandise.
5- On June 10, Tala Company purchased on account $50,000 of merchandise from Tigare Company, FOB...
5- On June 10, Tala Company purchased on account $50,000 of merchandise from Tigare Company, FOB destination, terms 2/10, n/30. Tala pays cash the freight costs of $600 on June 11. Damaged goods totaling $700 are returned to Tigare for credit on June 12. On June 19, Tala pays Tigare in full less the purchase discount. Both companies use a perpetual inventory system. Instructions (a) Prepare separate entries for each transaction on the books of Tala Company.
1) A bank manager with 11,000,000 Swiss francs (CHF) to invest in the foreign currency market...
1) A bank manager with 11,000,000 Swiss francs (CHF) to invest in the foreign currency market notices the current franc/US dollar exchange rate is CHF1.1/$ and the current Mexican peso/franc exchange rate is MP25/CHF. If a bank quotes a cross rate of $.03/MP, how much money can she make (in terms of francs) via triangular arbitrage? Round intermediate steps to four decimals and your final answer to two. Do not use currency symbols when entering your answer. 2) The peso...
On May 1, Mark sold merchandise on account to Bates for $50,000 terms 3/5, net 45....
On May 1, Mark sold merchandise on account to Bates for $50,000 terms 3/5, net 45. On May 4, Bates returns merchandise with a sales price of $2,000. On May 16, Mark receives payment from Bates for the balance due. Prepare journal entries to record the May transactions in Mark’s books.   MAY 1 . MAY 4 . May 16 . The two methods to estimate uncollectible accounts are------------------------------------- and--------------------------------------------------------------- Accounts Receivable minus Allowance for Doubtful accounts is called ------------------------------------------------------------------
Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on...
Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on open account. Sales are subject to a 7 percent sales tax. During September, Exceptional Electronics engaged in the following transactions. 1 Sold a high-definition television set on credit to Candy Cho; issued Sales Slip 101 for $3,000 plus sales tax of $210. 3 Sold stereo equipment on credit to Jim Peterson; issued Sales Slip 102 for $900 plus sales tax of $63. 7 Sold...
Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on...
Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on open account. Sales are subject to a 7 percent sales tax. During September, Exceptional Electronics engaged in the following transactions: DATE TRANSACTIONS 2019 Sept. 1 Sold a high-definition television set on credit to Candy Cho; issued Sales Slip 101 for $2,100 plus sales tax of $147. 3 Sold stereo equipment on credit to Jim Peterson; issued Sales Slip 102 for $900 plus sales tax...
Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on...
Exceptional Electronics began operations September 1, 2019. The firm sells its merchandise for cash and on open account. Sales are subject to a 7 percent sales tax. During September, Exceptional Electronics engaged in the following transactions: DATE TRANSACTIONS 2019 Sept. 1 Sold a high-definition television set on credit to Candy Cho; issued Sales Slip 101 for $2,700 plus sales tax of $189. 3 Sold stereo equipment on credit to Jim Peterson; issued Sales Slip 102 for $900 plus sales tax...
The Appliance Store began operations March 1, 2019. The firm sells its merchandise for cash and...
The Appliance Store began operations March 1, 2019. The firm sells its merchandise for cash and on open account. Sales are subject to a 6 percent sales tax. During March, The Appliance Store engaged in the following transactions: DATE TRANSACTIONS 2019 March 1 Sold merchandise on credit to Dave Allen; issued Sales Slip 101 for $500 plus sales tax of $30. 4 Sold merchandise on credit to Castor Phan; issued Sales Slip 102 for $850 plus sales tax of $51....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT