FX Corporation provides special effects for movies filmed in Manitoba. The company needs a sophisticated piece of

Question:

FX provides special effects for movies filmed in Manitoba. The company needs a sophisticated piece of equipment that can only be sourced from the United States. FX submitted a purchase order for US$ 50,000 for the equipment on July 1, 20X8, and received the equipment on October 31, 20X8. The company paid US$ 30,000 to the supplier on December 1, 20X8. The company will amortize the equipment starting in the month of acquisition. The equipment has an expected useful life of five years and the company uses the straight-line method for amortization. FX has a December 31, 20X8, year-end.
The relevant exchange rates are:
July 1, 20X8.................... C$ 1.00 = US$ 0.9500
October 31, 20X8.................. C$ 1.00 = US$ 0.9600
December 1, 20X8.................... C$ 1.00 = US$ 0.9900
December 31, 20X8.................. C$ 1.00 = US$ 1.0000

Required
1. Prepare all relevant journal entries for 20X8 relating to the above activities.
2. Calculate the carrying value of FX’s equipment and on its December 31, 20X8, SFP.

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