Accounting-7795288

Accounting-7795288 - Questions: Acme Corporation (a U.S....

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Questions: Acme Corporation (a U.S. company located in Sarasota, Florida) has the following import/export transactions in 2004: March 1 Bought inventory costing 50,000 pesos on credit. May 1 Sold 60 percent of the inventory for 45,000 pesos on credit August 1 Collected 40,000 pesos from customers. September 1 Paid 30,000 pesos to creditors. Currency exchange rates for 1 peso for 2004 are as follows: March 1 $0.17 May 1 0.18 August 1 0.19 September 1 0.20 December 31 0.21 For each of the following accounts, what will Acme report on its 2004 financial statements? a. Inventory Solution: Computation of the Inventory Inventory as December 31= Purchase- Cost of Goods Sold = 50000-30000=20000 pesos Cost of Goods Sold= 60% of Inventory= 60% * 50000 In US $ it will be 20000*.21= $4200 (Currency conversion as on December 31) Hence the Inventory is $4,200 b. Cost of Goods Sold: March 1 Solution: Computation of the Cost of Goods Sold Cost of Goods Sold= 60% of Inventory= 60% * 50000 Thus in US$= 30000*.17= $5100
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This note was uploaded on 02/21/2012 for the course ACT 492 taught by Professor Ngo during the Fall '11 term at Colorado.

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Accounting-7795288 - Questions: Acme Corporation (a U.S....

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