Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

OTTON AVIS YOU WERE SURE AND INCORRECT credit to Foreign Currency Transaction Gain Candy Bouquet Inc. imports specialty candy from a supplier in England at

image text in transcribed
OTTON AVIS YOU WERE SURE AND INCORRECT credit to Foreign Currency Transaction Gain Candy Bouquet Inc. imports specialty candy from a supplier in England at a price of 10,000. The exchange rate at the time of purchase is S171 Canadian dollars per pound At year-end, the exchange rate is $1.73 Canadian dollars per pound. The year-end journal entry would include debit to Accounts Payable. credit to Foreign Currency Transaction Loss THE CORRECT ANSWER credit to Accounts Payable Oi I DON'T KNOW YET WHAT YOU NEED TO KNOW At year-end, the payable must be reported at its current dollar value. Since the exchange rate increased from $131 to 51.73, Candy Bouquet Ine's payable will have increased. To record the change in the exchange rate of the pound at year- end (10,000 pounds - (S1,73-5.71), the journal entry would be as follows: DR Foreign Currency Transaction Loss $200 CR Accounts Payable $200

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

Recommended Textbook for

Accounting Information Systems A Practictioner Emphasis

Authors: Cynthia D. Heagy, Constance M. Lehmann

10th Edition

1891002821, 9781891002823

More Books

Students also viewed these Accounting questions

Question

=+a) Is this an experiment or an observational study? Explain.

Answered: 1 week ago

Question

Describe the role of HRD practitioners in OD interventions

Answered: 1 week ago