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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 2 years ago
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