Acct 721 E8.3 Solution.pdf - Acct 721 E8.3 MC8.5 Solution...

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Acct 721 E8.3, MC8.5 Solution E8.3 Recording Import and Export Transactions Import Transactions Transaction 1 Transaction date: Inventory 3,300 Accounts payable 3,300 Payment date: Exchange loss 500 Accounts payable 500 Write A/P up to reflect current spot rate Accounts payable 3,800 Foreign Currency 3,800 Note that there is no subsequent adjustment to the Inventory balance. The loss reflects that Taiwanese dollars cost $0.005 more at the payment date. The last entry assumes that the firm holds the required Foreign Currency. Transaction 2 Transaction date: Inventory 180,000 Accounts payable 180,000 Payment date: Accounts payable 9,000 Exchange gain 9,000 Write A/P down to reflect current spot rate Accounts payable 171,000 Foreign Currency 171,000 Note that there is no subsequent adjustment to the Inventory balance. The gain reflects that Polish zlotys cost $0.015 less at the payment date. The last entry assumes that the firm holds the Foreign Currency. Export Transactions Transaction 3 Transaction date: Accounts receivable 168,400 Sales revenue 168,400
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Acct 721 E8.3, MC8.5 Solution Payment date: Exchange loss
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