Campbell Inc. regularly buys materials in Argentina for use in its Canadian manufacturing facility. During 2013, Campbell
Question:
Campbell Inc. regularly buys materials in Argentina for use in its Canadian manufacturing facility. During 2013, Campbell made two acquisitions, one on February 1, 2013, and another on November 1, 2013, each for 10,000 units at 500 Argentine pesos (ARS) each. At year end there are 12,000 units remaining. The net realizable value at year end is 510 ARS per unit. None of the purchases had been paid for by the year end December 31, 2013. The following exchange rates exist for 2013:
February 1, 2013 ........ARS 1 = C$.231
November 1, 2013 ......ARS 1 = C$.240
December 31, 2013 ......ARS 1 = C$.229
Required
(a) Prepare the journal entries for 2013 (assume the weighted average method of costing inventory).
(b) Indicate the foreign currency effect on the comprehensive income statement for the year ending December 31, 2013.
(c) Indicate the inventory and accounts payable balances on the statement of financial position as at December 31, 2013.
Accounts PayableAccounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Step by Step Answer:
a February 1 2013 Dr Materials Purchase 1155000 Cr Accounts Payable 1155000 To record the purchase o...View the full answer
