t.php?attempt=4197248cmid=223469 onal Accounting Polly Bicycles Inc. is a British company that manufactures bicycles. Many of the components for the bicycles are purchased abroad and the finished product is sold to customers located in foreign countries. Following shows some of the transactions taking place during the year of 2014 and 2015: October 22, 2014 Sold on credit 2000 bicycles to Race Inc., a retailer in Germany, at a price of 280 each. Polly Bicycles Bicycles Inc. agreed to collect the full amount in euros from Race Inc. on 12 February 2015. The spot exchange rate at the time of sale was 0.85 per (Assume that Polly Bicycles Inc. uses periodic inventory system) November 10, 2014 Purchased on credit from Lion Tire Inc., a US company, 1500 bicycle tires. The purchase price was $40 per tire and spot exchange rate at the time of purchase was 0.76 per $US. Polly Bicycles Inc. paid half the total price in cash at the time of purchase and agreed to pay the remaining balance in two equal installments. First installment was to be paid on December 12, 2014 and second one on March 12, 2015. November 10, 2014 Purchased on credit a "bicycle assembly machine" from a Japanese firm. The purchase price was 40,000. Spot exchange rate at the time of purchase was 0.1 per . Polly Bicycles Inc. agreed to pay the full amount on March 28, 2015. December 12, 2014 Paid the amount payable to Lion Tire Inc as the first installment of liability. At the date of payment, the exchange rate was 0.75 per SUS. Feb 12, 2015 Collected the amount receivable from Race Inc. Current Exchange rate was, 0.80 per . March 12, 2015 Paid the remaining amount payable to Lion Tire Inc. At the date of payment, the exchange rate was 0.73 per SUS. March 28, 2015 Paid the amount payable to the Japanese firm. At the date of payment, the exchange rate was 0.12 per . Note: At 31 December 2014, the exchange rates were as follows: December 12, 2014 Paid the amount payable to Lion Tire Inc, as the first installment of liability. At the date of payment, the exchange rate was 0.75 per $US. Feb 12, 2015 Collected the amount receivable from Race Inc. Current Exchange rate was, 0.80 per . March 12, 2015 Paid the remaining amount payable to Lion Tire Inc. At the date of payment, the exchange rate was 0.73 per SUS. March 28, 2015 Paid the amount payable to the Japanese firm. At the date of payment, the exchange rate was 0.12 per . Note: At 31 December 2014, the exchange rates were as follows: 0.74 = 1 $US 0.11 = 1 0.83 = 1 Required a. Prepare the accounting entries in the accounting records of Polly Bicycles Inc. necessary to record the transactions taking place in 2014 b. Prepare the adjusting entries needed at December 31, 2014 for the Polly Bicycles Inc to adjust its accounts payable and accounts receivable. C. Prepare the accounting entries in the accounting records of Polly Bicycles Inc. necessary to record the transactions taking place in 2015 7 A, BI