Suppose Desmond Corporation completed the following international transactions May 1 Sold inventory on account to Aromando, the Italian automaker, for 65,000 The exchange rate of the euro was $ 1 33, and Aromando demands to pay in euros Ignore cost of goods sold 10 Purchased supplies on account fro...

Req 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT May 1 Accounts Receivable 65000 13 ...

Suppose Desmond Corporation completed the following international transactions: May 1 Sold inventory on account to Aromando, the

Question:

Suppose Desmond completed the following international transactions:
May 1 Sold inventory on account to Aromando, the Italian automaker, for 65,000. The of the euro was $ 1.33, and Aromando demands to pay in euros. Ignore cost of goods sold.
10 Purchased supplies on account from a Canadian company at a price of Canadian $ 52,000. The of the Canadian dollar was $ 0.72, and the payment will be in Canadian dollars.
17 Sold inventory on account to an English firm for 125,000 British pounds. Payment will be in pounds, and the of the pound was $ 1.93. Ignore cost of goods sold.
22 Collected from Aromando. The is 1 $ 1.36.
Jun 18 Paid the Canadian company. The of the Canadian dollar is $ 0.71.
24 Collected from the English firm. The of the British pound was $ 1.90.

Requirements
1. Record these transactions in Desmond’s journal, and show how to report the foreign currency transaction gain or loss on the income statement.
2. How will what you learned in this problem help you structure international transactions?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...