Question

Suppose Xavier Corporation completed the following international transactions:
May 1 Sold inventory on account to Giorgio, the Italian automaker, for €75,000. The exchange rate of the euro was $ 1.35, and Giorgio demands to pay in euros. Ignore cost of goods sold.
10 Purchased supplies on account from a Canadian company at a price of Canadian $ 46,000. The exchange rate of the Canadian dollar was $ 0.76, and the payment will be in Canadian dollars.
17 Sold inventory on account to an English firm for 139,000 British pounds. Payment will be in pounds, and the exchange rate of the pound was $ 1.91. Ignore cost of goods sold.
22 Collected from Giorgio. The exchange rate is €1 = $ 1.38.
Jun 18 Paid the Canadian company. The exchange rate of the Canadian dollar is $ 0.75.
24 Collected from the English firm. The exchange rate of the British pound was $ 1.88.

Requirements
1. Record these transactions in Xavier’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?



$1.99
Sales1
Views75
Comments0
  • CreatedJuly 25, 2014
  • Files Included
Post your question
5000