Johnson Corporation (a U.S. company) began operations on December 1, 2015, when the owner contributed $100,000 of his own money to start the business. 

Johnson then made the following import and export transactions with unaffiliated Mexican companies:

December 12, 2015 Purchased inventory for 150,000 pesos to the Account. Invoice in pesos.

15 December 2015 sold 60% of the inventory received on 12/12/15 for 120,000 pesos on account. Invoice in pesos.

January 1, 2016, purchased and paid 150,000 pesos owed to the Mexican supplier.

January 15, 2016, received 120,000 pesos from Mexican customer and immediately converted to US dollars.

Date                       Currency 

December 12         $.11=1 pesos 

December 15         $.12=1 pesos 

December 31         $.13=1 peso

 January 1               $.14=1 peso 

January 15              $.15=1 peso

 

Required

1.What was e-Sales on the income statement for the year ended December 31, 2015?

2. What was the SMM associated with these sales?

3. What is the balance of Accounts Receivable on the balance sheet dated 31 December 2015?

4. What is the Inventory balance on the 31 December 2015 balance sheet?

Answer rating: 100% (QA)

1To answer your questions we need to convert the transactions into US dollars using the given exchan... View the full answer