Carp Corp, a Canadian company, bought a machine from the United States for US$ 100,000 when the exchange rate was C$ 1 20 The liability for the machine was paid when the exchange rate was C$ 1 25 At what cost should the machine be recorded in the accounts, assuming (a) The one transaction theory, (...

a The machine would be recorded at 125000 th ...

Carp Corp, a Canadian company, bought a machine from the United States for US$ 100,000 when the

Question:

Carp Corp, a Canadian company, bought a machine from the United States for US$ 100,000 when the was C$ 1.20. The liability for the machine was paid when the was C$ 1.25. At what cost should the machine be recorded in the accounts, assuming
(a) The one-transaction theory,
(b) The two-transaction theory?

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...