Leigh of New York sells its products to customers in the United States and the United...

Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2017, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 18,000 pounds. The exchange rate on that day for £1 was $2.0235. On December 31, 2017, when Leigh prepared its financial statements, the rate was £1 for $2.0174. Bronson paid its bill in full on January 15, 2018, at which time the exchange rate was £1 for $2.0195. Leigh immediately exchanged the 18,000 pounds for U.S. dollars. Prepare Leigh’s journal entries on December 16, December 31, and January 15. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

Solutions

Expert Solution

Date	Accounts Titles & Explanation	Debit	Credit

16-Dec	Accounts receivable - Bronson	$36,423
	Sales		$36,423

31-Dec	Foreign exchange loss	$110
	Accounts receivable - Bronson		$110

15-Jan	Cash	$36,351
	Accounts receivable - Bronson		$36,313
	Foreign exchange gain		$38


Working
	Pounds	Rate	Us Dollars	Exchange gain(loss)
12/16/2017	18,000	2.0235	36,423
12/31/2017	18,000	2.0174	36,313	(110)	Loss
1/15/2018	18,000	2.0195	36,351	38	Gain

ekkarill92 answered 1 year ago

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