Question
Bartlett Company, headquartered in Cincinnati, Ohio, has occasional transactions with companies in a foreign country whose currency is the lira. Transactions in 2015 February 1
Bartlett Company, headquartered in Cincinnati, Ohio, has occasional transactions with companies in a foreign country whose currency is the lira.
Transactions in 2015
February 1 Bought equipment for 65,000 lira on credit.
April 1 Paid for the equipment purchased February 1.
June 1 Bought inventory for 105,000 lira on credit.
August 1 Sold 60 percent of inventory purchased June 1 for 65,000 lira on credit.
October 1 Collected 52,000 lira from the sales made on August 1, 2015.
November 1 Paid 70,000 lira on the debts incurred on June 1, 2015.
Transactions in 2016
February 1 Collected remaining 13,000 lira from August 1, 2015, sales.
March 1 Paid remaining 35,000 lira on the debts incurred on June 1, 2015.
Currency exchange rates for 1 lira for 2015
February 1 $0.59
April 10.60
June 10.62
August 10.63
October 10.64
November 10.65
December 310.67
Currency exchange rates for 1 lira for 2016
February 1 $0.69March 10.70
Prepare journal entries for the following transactions in U.S. dollars. Also prepare any necessary adjusting entries at December 31 caused by fluctuations in the value of the lira. Assume that the company uses a perpetual inventory system.
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
