Delaney Inc. has several transactions with foreign entities. Each transaction is denominated in the local currency unit
Question:
Delaney Inc. has several transactions with foreign entities. Each transaction is denominated in the local currency unit of the country in which the foreign entity is located. For each of the following independent cases, determine the December \(31,20 \mathrm{X} 2\), year-end balance in the appropriate accounts for the case. Write "NA" for "not applicable" in the space provided below if that account is not relevant to the specific case.
Case 1. On November 12, 20X2, Delaney Company purchased goods from a foreign company at a price of \(\operatorname{LCU} 40,000\) when the direct exchange rate was \(1 \mathrm{LCU}=\$ .45\). The account has not been settled as of December \(31,20 \times 2\), when the exchange rate has decreased to \(1 \mathrm{LCU}=\$ .40\).
Case 2. On November 28, 20X2, Delaney Company sold goods to a foreign entity at a price of \(\operatorname{LCU} 20,000\) when the direct exchange rate was \(1 \mathrm{LCCU}=\$ 1.80\). The account has not been settled as of December 31, 20X2, when the exchange rate has increased to \(1 \mathrm{LCU}=\$ 1.90\).
Case 3. On December 2, 20X2, Delaney Company purchased goods from a foreign company at a price of \(\operatorname{LCU} 30,000\) when the direct exchange rate was \(1 \mathrm{LCU}=\$ .80\). The account has not been settled as of December 31,20X2, when the exchange rate has increased to \(1 \mathrm{LCU}=\$ .90\).
Case 4. On December 12, 20X2, Delaney Company sold goods to a foreign entity at a price of \(\operatorname{LCU} 2,500,000\) when the direct exchange rate was \(1 \mathrm{LCU}=\$ .003\). The account has not been settled as of December 31, 20X2, when the exchange rate has decreased to \(1 \mathrm{LCU}=\$ .0025\).
\section*{Required}
Provide the December 31, 20X2, year-end balances on the records of Delaney, Inc., for each of the following applicable items:
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9780072444124
5th Edition
Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King