Question

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.

Argentina

Description		Debit	Credit
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record purchase of inventory
Foreign currency		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record purchase sufficient foreign currency to pay supplier.
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record payment of liability to supplier.

Canada

Description		Debit	Credit
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record purchase of inventory
Foreign currency		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record purchase sufficient foreign currency to pay supplier.
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record payment of liability to supplier.

India

Description		Debit	Credit
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record purchase of inventory
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
Accounts receivable		Answer	Answer
To record purchase sufficient foreign currency to pay supplier.
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record payment of liability to supplier.

South Africa

Description		Debit	Credit
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record purchase of inventory
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
Accounts receivable		Answer	Answer
To record purchase sufficient foreign currency to pay supplier.
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales		Answer	Answer
To record payment of liability to supplier.

Answer 1

Journal Entries :-

Argentina -

Date	Particulars	Debit($)	Credit($)
	Accounts Receivable A/c Dr.(250000*$0.056)	14000
	To Sales Revenue A/c		14000
	Cash A/c Dr. (250000*0.049)	12250
	Foreign Exchange Loss A/c Dr.	1750
	To Accounts Receivable A/c		14000

Canada -

Date	Particulars	Debit($)	Credit($)
	Accounts Receivable A/c Dr.(400000*$0.732)	292800
	To Sales Revenue A/c		292800
	Cash A/c Dr. (400000*0.713)	285200
	Foreign Exchange Loss A/c Dr.	7600
	To Accounts Receivable A/c		292800

India -

Date	Particulars	Debit($)	Credit($)
	Accounts Receivable A/c Dr.(300000*$0.016)	4800
	To Sales Revenue A/c		4800
	Cash A/c Dr. (300000*0.018)	5400
	To Accounts Receivable A/c		4800
	To Foreign Exchange Loss A/c		600

South Africa -

Date	Particulars	Debit($)	Credit($)
	Accounts Receivable A/c Dr.(100000*$0.074)	7400
	To Sales Revenue A/c		7400
	Cash A/c Dr. (100000*0.077)	7700
	To Accounts Receivable A/c		7400
	To Foreign Exchange Loss A/c		300