PROBLEM TWO (8 Points)

Papa Petes International is a U.S. food distributor that buys and sells merchandise in several nonU.S. currencies. Below is a summary of transactions occurring in 2020.

1. Sales to Canadian customers, totaling C$1,000,000, occurred when the exchange rate was $0.73/C$. C$200,000 was for cash, but C$700,000 was paid by customers when the rate was $0.724/C$. The remainder is unpaid at yearend, when the rate is $0.722/C$.

2. Sales to Italian customers, totaling 10,000,000, occurred when the exchange rate was $1.17/. The company was paid 8,000,000 when the rate was $1.185. The remainder is unpaid at yearend, when the rate is $1.188.

3. Purchases from Mexican suppliers, totaling Mex$3,000,000, occurred when the exchange rate was $0.055/Mex$. The company paid the suppliers Mex$2,700,000 when the rate was $0.0582/Mex$. The remainder is unpaid at yearend, when the rate is $0.0588/Mex$. Mex$2,800,000 of the merchandise was sold by Papa Petes during 2020.

4. Purchases from Hong Kong suppliers, totaling HK$4,000,000, occurred when the exchange rate was $0.139/HK$. The company paid the suppliers HK$3,400,000 when the rate was $0.133/HK$, and the remainder is unpaid at yearend, when the rate is $0.131/HK$. HK$3,600,000 of this merchandise was sold by Papa Petes during 2020

Required

Calculate the following amounts, appearing in Papa Petes 2020 financial statements, related to the above information. Show calculations clearly.

1. Accounts receivable and accounts payable, end of 2020

2. Sales revenue for 2020

3. Cost of goods sold for 2020

4. Inventory balance, end of 2020

5. Exchange gain or loss for 2020

Accounts receivable and accounts payable, end of 2020

b. Sales revenue for 2020

c. Cost of goods sold for 2020

d. Inventory balance, end of 2020

e. Exchange gain or loss for 2020