Question

Pinnacle Foods imports a variety of items for resale to U.S. retailers. Following is a description of purchases and foreign-currency-denominated payments made in the last accounting period, plus the direct exchange rates for each date:
Country	Amount	Currency	Spot rate at purchase	Spot rate at payment
Australia	200,000	Australian dollar	$0.76	$0.73
Thailand	800,000	Baht	0.0345	0.0365
Hong Kong	5,000,000	Hong Kong dollar	0.1319	0.1362
Jordan	500,000	Dinar	1.41	1.39
Required
Prepare the journal entries made by Pinnacle, a U.S. company, to record the above purchase and payment transactions.
Australia
Description		Debit	Credit
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
To record purchase of inventory
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
To record purchase sufficient foreign currency to pay supplier.
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
	Foreign Currency	?	?
To record payment of liability to supplier.
Thailand
Description		Debit	Credit
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
To record purchase of inventory
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
To record purchase sufficient foreign currency to pay supplier.
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
A/p OR Cash OR Gain OR Loss Or Forgein Currency or Inventory		?	?
	Foreign Currency	?	?
To record payment of liability to supplier.

Answer 1

No.	Description	Debit	Credit
1	Inventory (200000*.76)	$ 1,52,000.00
	A/P		$ 1,52,000.00
	(To record purchase of Inventory)
2	Forgein Currency (200000*.73)	$ 1,46,000.00
	Cash		$ 1,46,000.00
	(To Record Purchase of FC)
3	A/P	$ 1,52,000.00
	Gain		$      6,000.00
	Forgein Currency		$ 1,46,000.00
	(To Record Payment)

No.	Description	Debit	Credit
1	Inventory (800000*0.0345)	$    27,600.00
	A/P		$    27,600.00
	(To record purchase of Inventory)
2	Forgein Currency (800000*.0365)	$    29,200.00
	Cash		$    29,200.00
	(To Record Purchase of FC)
3	A/P	$    27,600.00
	Loss	$      1,600.00
	Forgein Currency		$    29,200.00
	(To Record Payment)

No.	Description	Debit	Credit
1	Inventory (5000000*0.1319)	$ 6,59,500.00
	A/P		$ 6,59,500.00
	(To record purchase of Inventory)
2	Forgein Currency (5000000*0.1362)	$ 6,81,000.00
	Cash		$ 6,81,000.00
	(To Record Purchase of FC)
3	A/P	$ 6,59,500.00
	Loss	$    21,500.00
	Forgein Currency		$ 6,81,000.00
	(To Record Payment)

No.	Description	Debit	Credit
1	Inventory (500000*1.41)	$ 7,05,000.00
	A/P		$ 7,05,000.00
	(To record purchase of Inventory)
2	Forgein Currency (500000*1.39)	$ 6,95,000.00
	Cash		$ 6,95,000.00
	(To Record Purchase of FC)
3	A/P	$ 7,05,000.00
	Gain		$    10,000.00
	Forgein Currency		$ 6,95,000.00
	(To Record Payment)