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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 53,000 lira on credit. |
April 1 | Paid for the equipment purchased February 1. |
June 1 | Bought inventory for 69,000 lira on credit. |
August 1 | Sold 60 percent of inventory purchased June 1 for 53,000 lira on credit. |
October 1 | Collected 42,400 lira from the sales made on August 1, 2015. |
November 1 | Paid 46,000 lira on the debts incurred on June 1, 2015. |
Transactions in 2016 |
February 1 | Collected remaining 10,600 lira from August 1, 2015, sales. |
March 1 | Paid remaining 23,000 lira on the debts incurred on June 1, 2015. |
Currency exchange rates for 1 lira for 2015 |
February 1 | $ | 0.47 | |
April 1 | 0.48 | ||
June 1 | 0.50 | ||
August 1 | 0.51 | ||
October 1 | 0.52 | ||
November 1 | 0.53 | ||
December 31 | 0.55 | ||
|
Currency exchange rates for 1 lira for 2016 |
February 1 | $ | 0.57 | |
March 1 | 0.58 | ||
|
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. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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