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Manufacturing equipment with a useful life of 10 years was purchased from a U.S. supplier for US$200,000 in November. At the time, the exchange rate
Manufacturing equipment with a useful life of 10 years was purchased from a U.S. supplier for US$200,000 in November. At the time, the exchange rate in effect was US$1 = C$1.22 and the equipment and associated payable were recorded at $244,000. At year end, the payable was still outstanding and both it and the equipment were still recorded at $244,000.The year-end exchange rate was US$1 = C$1.32. Misty is not sure if either the initial or year-end amounts were recorded correctly.
explain the accounting analysis and issues for above transaction
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