BG Corp. has vendors and customers in foreign markets. The company purchases raw materials from and...

  

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BG Corp. has vendors and customers in foreign markets. The company purchases raw materials from and sells finished goods to companies whose functional currency is the euro (€). BG keeps its books in U.S. dollars. Use the foreign currency exchange rates in the exhibit above to prepare the journal entries for the situations below. Foreign Currency Exchange Rates Spot Rate April 30, Year 1 €1.00 = $1.34 May 1, Year 1 €1.00 = $1.36 May 15, Year 1 €1.00 = $1.25 May 31, Year 1 €1.00 = $1.15 June 1, Year 1 €1.00 = $1.14 Average Rate Average for May, Year 1 €1.00 = $1.16 Average for Year 1 €1.00 = $1.26 On May 1, Year 1, BG Corp. sold finished goods for €2,000,000 on account. Prepare the journal entry, if any, to record the sale. On May 31, Year 1, the customer paid for the goods sold on May 1, Year 1, and BG sold the euros received at the spot rate. Prepare the net journal entry. O No Entry Required Account Name Debit On May 1, Year 1, BG purchased raw materials from a vendor for €1,600,000 on account. Prepare the journal entry, if any, to record the purchase. On May 31, Year 1, BG purchased €1,600,000 and paid for the materials purchased on May 1, Year 1. Prepare the net journal entry. On June 1, Year 1, BG issued a purchase order for raw materials from a vendor for €2,800,000. Prepare the journal entry, if any, to record the purchase order. BG Corp. has vendors and customers in foreign markets. The company purchases raw materials from and sells finished goods to companies whose functional currency is the euro (€). BG keeps its books in U.S. dollars. Use the foreign currency exchange rates in the exhibit above to prepare the journal entries for the situations below. Foreign Currency Exchange Rates Spot Rate April 30, Year 1 €1.00 = $1.34 May 1, Year 1 €1.00 = $1.36 May 15, Year 1 €1.00 = $1.25 May 31, Year 1 €1.00 = $1.15 June 1, Year 1 €1.00 = $1.14 Average Rate Average for May, Year 1 €1.00 = $1.16 Average for Year 1 €1.00 = $1.26 On May 1, Year 1, BG Corp. sold finished goods for €2,000,000 on account. Prepare the journal entry, if any, to record the sale. On May 31, Year 1, the customer paid for the goods sold on May 1, Year 1, and BG sold the euros received at the spot rate. Prepare the net journal entry. O No Entry Required Account Name Debit On May 1, Year 1, BG purchased raw materials from a vendor for €1,600,000 on account. Prepare the journal entry, if any, to record the purchase. On May 31, Year 1, BG purchased €1,600,000 and paid for the materials purchased on May 1, Year 1. Prepare the net journal entry. On June 1, Year 1, BG issued a purchase order for raw materials from a vendor for €2,800,000. Prepare the journal entry, if any, to record the purchase order.

Answer rating: 100% (QA)

1 On May 1 Year 1 BG Corp sold finished goods for 2000000 on account Prepare the journal entry ... View the full answer