On October 1, 20x1, Mohammed Ltd, a US company, acquired goods on account from Tokyo industries, a Japanese company, for $14,000, 2,000,000 yen. Mohammed Ltd prepared financial statements at its year-end of december 31, 20x1, settlement of the payable was made on April 1, 20x2.

Date	Direct exchange rate $
October 1, 20x1	0.0070
December 31, 20x1	0.0080
April 1, 20x2	0.0076

Required

1- What value would Mohammed Ltd record on the balance sheet date?

2- What journal entries will Mohammed Ltd show on the transaction data assuming the transaction is denominated in Japanese yen?

3- Mohammed Ltd journal entry on the settlement data would be?

4- Would Mohammed Ltd record a gain or loss on the settlement date?

5- What is the transaction date?

Answer rating: 100% (QA)

1 The value that Mohammed Ltd would record on the balance sheet date December 31 20x1 is the transla... View the full answer