(Learning Objective 4: Accounting for transactions stated in a foreign currency)

Ocean Belting sells goods for 1,100,000 Mexican pesos. The foreign exchange rate for a peso is $0.086 on the date of sale. Ocean Belting then collects cash on April 24, when the exchange rate for a peso is $0.089. Record Ocean’s cash collection.

Ocean Belting buys inventory for 28,000 Swiss francs. A Swiss franc costs $0.82 on the purchase date. Record Ocean Belting’s payment of cash on October 25, when the exchange rate for a Swiss Franc is $0.87.

In these two scenarios, which currencies strengthened? Which currencies weakened?