Voltac Corporation (a U.S. company located in Charlotte, North Carolina) has the following important/export transactions denominated in Mexican pesos in 2017:

March 1st: Bought inventory costing 100,000 pesos on credit

May 1st: Sold 60 percent of the inventory for 80,000 pesos on credit

August 1st: Collected 70,000 pesos from customers

September 1st: Paid 60,000 pesos to suppliers

Currency exchange rates for 1 peso for 2017 are as follows:

March 1st: $0.10

May 1st: 0.12

August 1st: 0.13

September 1st: 0.14

December 31: 0.15

For each of the following accounts. how much will Voltac report on it'd 2017 financial statements?

a. Inventory

b. Cost of Goods Sold

c. Sales

d. Accounts Receivable

e. Accounts Payable

f. Cash

The problem asks for balances in certain accounts. However, in order to get balances, you must do the following (you dont have to submit in order I have written here these are just items you need to do): 1) Provide each journal entry.

2) Provide T-accounts for Accounts Receivable (A/R) and Accounts payable (A/P). These counts need to be adjusted at the end of the year. With a T-account, you can track the item in dollars and in pesos, putting your note on the line, just outside the T. This tracking is necessary because you need to find out how many pesos are left at original rates (the rate when the journal entry was made), which will provide the unadjusted balance. Then you will convert the balance from pesos to dollars at year-end.

3) Keep track of FC exchange gain or loss by import and by export. This can be a schedule, with dates and amounts taken from your journal entries. Or you can do it in a T-account.

4) Show the net overall FC exchange gain or loss for the year, as one amount from imports and exports.

Answer this question: Is the final gain or loss more from importing or from exporting? Note: To adjust A/R and A/P at end of year: -- What are unadjusted balances in FC and in US$ at the original rates used from the journal entries? -- What should the balances be in US$ at the balance sheet rates? -- The difference in dollars is the amount for the adjusting journal entry for the final journal entry that is the FC exchange gain or loss at the balance sheet date.