Importing and Exporting Journal Entries During December of the current year, Teletex Systems, Inc., a company based in Seattle, Washington, entered into the following transactions:
Dec 10 Sold seven office computers to a company located in Colombia for 8,541,000 pesos. On this date, the spot rate was 365 pesos per U.S. dollar.
12 Purchased computer chips from a company domiciled in Taiwan. The contract was denominated in 500,000 Taiwan dollars. The direct exchange spot rate on this date was $.0391.
A. Prepare journal entries to record the transactions above on the books of Teletex Systems, Inc. The company uses a periodic inventory system.
B. Prepare journal entries necessary to adjust the accounts as of December 31. Assume that on December 31 the direct exchange rates were as follows:
Colombia peso..... $.00268
Taiwan dollar .....$.0351
C. Prepare journal entries to record settlement of both open accounts on January 10. Assume that the direct exchange rates on the settlement dates were as follows:
D. Prepare journal entries to record the December 10 transaction, adjust the accounts on December 31, and record settlement of the account on January 10, assuming that the transaction was denominated in dollars rather than pesos. Assume the same exchange rates as those given.