Question

A company in the United States, imports and exports equipment. The company uses a perpetual inventory system. During May the company entered into the following transactions. All rate quotations are direct exchange rates.

May 2 Purchased power tools from a wholesaler in Japan, on account, at an invoice cost of 1,600,000 yen. On this date the exchange rate for the yen was $.0072.

4 Sold hand tools on credit that were manufactured in the U.S. to a retail outlet located in West Germany. The invoice price was $2,800. The exchange rate for marks was $.5829.

8 Sold electric drills on account to a retailer in New Zealand. The invoice price was 16,800 U.S. dollars and the exchange rate for the New Zealand dollar was $.576. 10 Purchased drill bits on account from a manufacturer located in Belgium. The billing was for 801,282 francs. The exchange rate for francs was $.0312.

15 Paid 1,000,000 yen on account to the wholesaler for purchases made on May 2. The exchange rate on this date was $.0067.

17 Settled the accounts payable with the Belgium manufacturer. The exchange rate was $.0368.

21 Received full payment from the New Zealand retailer. The exchange rate was $.568.

29 Completed payment on the May 2 purchase. The exchange rate was $.0078.
(Show calculations)
Prepare journal entries on the books of the US Company to record the transactions listed above.

Answer 1