Craigs Inc had the following transactions 1 On September 1 Craigs
Craigs Inc. had the following transactions:
1. On September 1, Craigs Inc. purchased parts from an Indian company for a Canadian dollar equivalent value of $8,000, to be paid on February 20. The exchange rates between the Indian rupee (INR) and the Canadian dollar were:
September 1 ....... INR 1 = C$.022
December 31 ....... INR 1 = C$.024
February 20 ....... INR 1 = C$.021
2. On November 1, Craigs Inc. sold products to a Swiss customer for a Canadian dollar equivalent of 10,000 SF, to be received on March 10. The exchange rates between the Swiss franc (SF) and Canadian dollar were:
November 1 ....... SF 1 = C$0.70
December 31 ....... SF 1 = C$0.66
March 10 ....... SF 1 = C$0.68
Required
(a) Assume the functional currency is the Canadian dollar. Prepare the entries required for the dates of the transactions and their settlement in Canadian dollars.
(b) Assume the two transactions are denominated in the applicable local currency units of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the local currency units of the Indian company (rupees) and the Swiss customer (SF).
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