Question: December 12, 2009 Paid the amount payable to Lion Tire Inc. as the first in-...

 

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Question: December 12, 2009 Paid the amount payable to Lion Tire Inc. as the first in- stallment of liability. At the date of payment, the exchange rate was £0.75 Rally Bicycles Inc. is a British company that manufactures bicycles. Many of the components for the bicycles are purchased abroad and the finished prod- uct is sold to customers located in foreign countries. Following shows some of the transactions taking place during the year of 2009 and 2010: per $US. Feb 12, 2010 Collected the amount receivable from Race Inc. Current Ex- change rate was, £0.80 per €. March 12, 2010 Paid the remaining amount payable to Lion Tire Inc. At the date of payment, the exchange rate was £0.73 per $US. October 22, 2009 Sold on credit 2,000 bicycles to Race Inc., a retailer in Germany, at a price of €280 each. Speed Inc. agreed to collect the full amount in Euros from Race Inc. on 12February, 2010. The spot exchange rate at the time of sale wvas £0.85 per €. (Assume that Rally Inc. uses periodic inventory system) March 28, 2010 Paid the amount payable to the Japanese firm. At the date of payment, the exchange rate was £0.12 per ¥. November 10, 2009 Purchased on credit from Lion Tire Inc., a US company, 1500 bicycle tires. The purchase price was $40 per tire and spot exchange rate at the time of purchase was £0.76 per SUS. Rally Inc. paid half the total price in cash at the time of purchase and agreed to pay the remaining balance in two equal installments. First installment was to be paid on December 12, Note: At 31 December 2009, the exchange rates were as follows: £0.74 = 1 $US 2009 and second one on March 12, 2010. £0.11 = 1¥ November 10, 2009 Purchased on credit a "bicycle assembly machine" from a Japanese firm. The purchase price was ¥40,000. Spot exchange rate at the time of purchase was £0.l per ¥. Rally Inc. agreed to pay the full amount on March 28, 2010. £0.83 = 1 € Required Yakınlaştima Doay Ekran 1-2/3 £0.83 1€ Required 1. Prepare the accounting entries in the accounting records of Rally Inc. necessary to record the transactions taking place in 2009. 2. Prepare the adjusting entries needed at December 31, 2009 for the Rally Inc to adjust its accounts payable and accounts receivable. 3. Prepare the accounting entries in the accounting records of Rally Inc. necessary to record the transactions taking place in 2010 Question: December 12, 2009 Paid the amount payable to Lion Tire Inc. as the first in- stallment of liability. At the date of payment, the exchange rate was £0.75 Rally Bicycles Inc. is a British company that manufactures bicycles. Many of the components for the bicycles are purchased abroad and the finished prod- uct is sold to customers located in foreign countries. Following shows some of the transactions taking place during the year of 2009 and 2010: per $US. Feb 12, 2010 Collected the amount receivable from Race Inc. Current Ex- change rate was, £0.80 per €. March 12, 2010 Paid the remaining amount payable to Lion Tire Inc. At the date of payment, the exchange rate was £0.73 per $US. October 22, 2009 Sold on credit 2,000 bicycles to Race Inc., a retailer in Germany, at a price of €280 each. Speed Inc. agreed to collect the full amount in Euros from Race Inc. on 12February, 2010. The spot exchange rate at the time of sale wvas £0.85 per €. (Assume that Rally Inc. uses periodic inventory system) March 28, 2010 Paid the amount payable to the Japanese firm. At the date of payment, the exchange rate was £0.12 per ¥. November 10, 2009 Purchased on credit from Lion Tire Inc., a US company, 1500 bicycle tires. The purchase price was $40 per tire and spot exchange rate at the time of purchase was £0.76 per SUS. Rally Inc. paid half the total price in cash at the time of purchase and agreed to pay the remaining balance in two equal installments. First installment was to be paid on December 12, Note: At 31 December 2009, the exchange rates were as follows: £0.74 = 1 $US 2009 and second one on March 12, 2010. £0.11 = 1¥ November 10, 2009 Purchased on credit a "bicycle assembly machine" from a Japanese firm. The purchase price was ¥40,000. Spot exchange rate at the time of purchase was £0.l per ¥. Rally Inc. agreed to pay the full amount on March 28, 2010. £0.83 = 1 € Required Yakınlaştima Doay Ekran 1-2/3 £0.83 1€ Required 1. Prepare the accounting entries in the accounting records of Rally Inc. necessary to record the transactions taking place in 2009. 2. Prepare the adjusting entries needed at December 31, 2009 for the Rally Inc to adjust its accounts payable and accounts receivable. 3. Prepare the accounting entries in the accounting records of Rally Inc. necessary to record the transactions taking place in 2010

Answer rating: 100% (QA)

Answer 1 Date Particulars Dr Cr 22 October 2009 Accounts Receivable Race Inc 476000 Sales 476000 Sal... View the full answer