Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CI Merchant Company had the following foreign currency transactions 1. On November 1, 20X6, Merchant sold goods to a company located in Munich, Germany. The

image text in transcribed
image text in transcribed
image text in transcribed
CI Merchant Company had the following foreign currency transactions 1. On November 1, 20X6, Merchant sold goods to a company located in Munich, Germany. The receivable was to be settled in European euros on February 1, 20x7 with the receipt of 170,000 by Merchant Company 2 on November 1, 20X6, Merchant purchased machine parts from a company located in Berlin, Germany. Merchant is to pay 85,000 on February 1, 20x7. The direct exchange rates are as follows: November 1, 20X6 December 31, 20X6 February 1, 20x7 1 - $ 0.60 1 - $ 0.62 61 - $ 0.50 Required: Record the T-accounts for the following transactions (Record the transactions in the given order) 1. The November 1, 20X6, export transaction (sate) 2. The November 1, 20x6. import transaction (purchase). 3. The December 31, 20x6. year-end adjustment required of the foreign currency-denominated receivable of 170,000, 4. The December 31, 20x6 year-end adjustment required of the foreign currency-denominated payable of 85.000 5. The February 1, 20X7, adjusting entry to determine the US dollar-equivalent value of the foreign currency receivable on that date MINU UUSVULL 3. The December 31, 20X6, year-end adjustment required of the foreign currency-denominated receivable of 170,000 4. The December 31, 20X6. year end adjustment required of the foreign currency-denominated payable of 85,000. 5. The February 1, 20X7, adjusting entry to determine the US dollar-equivalent value of the foreign currency receivable on that date 6. The February 1, 20X7, adjusting entry to determine the US dollar-equivalent value of the foreign currency payable on that date. 7. The February 1, 20X7 settlement of the foreign currency receivable, 8. The February 1, 20X7 settlement of the foreign currency payable. Foreign Currency Units () Accounts Receivable () Bal 22/X7 Bal 12/31/X6 0 Bal 2/2/X7 Bal 2/1/X7 0 Bal 2/2/X7 Bal 2/2/X7 Bal. 2/2/X7 0 Bal. 12/31/X6 Bal. 2/2/X7 0 Bali 2/1/X7 0 Bal 2/2/X7 0 Bal 2/2/X7 0 Bal 2/2/27 0 Foreign Currency Transaction Gain Bal 2/2/X7 O Bal 2/2/X7

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

Define what critical thinking is and what it is not.

Answered: 1 week ago

Question

Prepare a constructive performance appraisal.

Answered: 1 week ago

Question

List the advantages of correct report formatting.

Answered: 1 week ago