Universal Instruments is based in the USA and prepares its financial statements in dollars. The company uses
Question:
Universal Instruments is based in the USA and prepares its financial statements in dollars. The company uses a perpetual inventory system. On December 5, 20X5, Universal had two separate purchase transactions from suppliers in Europe.
The first transaction was for $100,000. Terms of sale provide for settlement in dollars. The account was paid in full on January 11, 20X6.
The second transaction was for 100,000€. Terms of sale provide for settlement in euros. The account was paid in full on January 11, 20X6.
The exchange rate of dollars for euros fluctuated as follows:
Prepare journal entries showing the inventory purchase, year-end adjustment (if necessary), and final settlement for each of these two transactions.
December 5, 20X5: $1.47 per euro December 31, 20X5: $1.46 per euro January 11, 20X6: $1.49 per euro
Step by Step Answer:
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