Mozzie Ltd has a functional currency of A$. On 1 April 2023, Mozzie Ltd sells goods to
Question:
Mozzie Ltd has a functional currency of A$. On 1 April 2023, Mozzie Ltd sells goods to a customer on credit terms for US$100 000. On 1 August 2023, cash is received from the customer to settle the invoice Exchange rates are:
1 April 2023 US$1.00 = A$1.30
30 June 2023 US$1.00 = A$1.50
1 August 2023 US$1.00 = A$1.40
What is the journal entry at the date of cash receipt on 1 August 2023?
a.
DR Cash $140 000
DR Foreign Exchange Loss $10 000
CR Accounts Receivable $150 000
b.
DR Cash $140 000
CR Foreign Exchange Gain $10 000
CR Accounts Receivable $130 000
c.
DR Cash $140 000
CR Accounts Receivable $140 000
d.
DR Cash $150 000
CR Foreign Exchange Gain $10 000
CR Accounts Receivable $140 000
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta