Journal EntriesExporting Transactions

GAF manufactures electrical cells at its St. Louis facility. The companys fiscal year-end is September 30. It has adopted the perpetual inventory cost flow method to control inventory costs. The company entered into the following transactions during the month of September. All exchange rates are direct quotations.

Billing Rate of

Date Transaction Amount Exchange

2014

Sept. 5 Exported 10 electrical cells to a company

located in Argentina. Cost per unit, $950. 17,341 pesos $1.1291

9 Received raw materials ordered from a British

company. The goods were shipped FOB

destination and had not been recorded on the

books of GAF, Inc. 12,200 Pounds 1.6821

14 Exported 12 electrical cells to a company

domiciled in Norway. Cost per unit, $970. 160,274 Krone .1450

30 End of fiscal year-end.

Peso 1.1091

British pound 1.6911

Krone .1530

Oct. 5 Received full payment for the 10 units sold on

September 5. 1.1190

9 Paid British company in full for raw materials

purchased September 9. 1.5948

30 Received full payment for 12 units sold on September 14. .1440

Required:

A. Prepare the journal entries required on the books of GAF to record the transactions and year-end adjustments. Round all computations to the nearest dollar.

B. Based on the two exporting transactions listed above, complete the following table.

Transaction

Sept. 5 Sept. 14

September 30, 2014, year-end:

1. Sales

2. Transaction gain (loss)

September 30, 2015, year-end:

3. Sales

4. Transaction gain (loss)

5. Net effect on income for both years (Sum lines 14)

6. Cash received on settlement date