foreign country whose curmency is the lira Transactions in 2015 February 1 Bough

Question

foreign country whose curmency is the lira Transactions in 2015 February 1 Bought equipment for 45,000 lira on credit. April 1 June 1 August 1Sold 70 percent of inventory purchased June 1 for 45,000 lira on aredit Ocober 1 Collected 36,000 lira from the sales made on August 1, 2015. November 1 Paid 30,000 ira on the debts incurred on June 1, 2015 Paid for the equipment purchased Febnuary 1 Bought inventory for 45,000 lira on aredit Transactions in 2016 February 1 Collected remaining 9,000 lira from August 1, 2015, saies March 1 Paid remaining 15,000 ira on the debts incurred on June 1, 2015 Currency exchange rates for 1 lira for 2015 February 1 April 1 June 1 August 1 October 1 November1 December 3 $0.39 0.40 0.42 043 044 0.45 047 Currency exchange rates for 1 lira for 2016 $0.49 0.50 March 1 Prepare jounal entries at December 31 caused by fluctuations in the value of the lira. Assume that the company unesa perpetual inventory system. (Do not round intermediate calculations. It no transactionlevent, select "No journal entry required" in the first account field entries for the following transactions in U.S. dollars Also prepare any necessary adiusting is required for a list Journal entry worksheet Record the purchase of equipment. debits before credits 0201/2015

Explanation / Answer

Feb-01 Equipment A/c(45000*0.39)    17,550.00 To Accounts Payable A/c    17,550.00 Apr-01 Accounts Payable A/c    17,550.00 Foreign Exchange Currency Gain/Loss A/c          450.00 To Cash A/c (45000*0.40)    18,000.00 Jun-01 Inventory A/c (45000*0.42)    18,900.00 To Accounts Payable A/c    18,900.00 Aug-01 Debtors A/c (45000*0.43)    19,350.00 To Sales A/c    19,350.00 Cost of Goods Sold A/c (45000*70%*0.43)    13,545.00 To Inventory A/c    13,230.00 To Foreign Exchange Currency Gain/Loss A/c          315.00 Oct-01 Cash A/c (36000*0.44)    15,840.00 To Debtors A/c    15,480.00 To Foreign Exchange Currency Gain/Loss A/c          360.00 Nov-01 Accounts Payable A/c (30000*0.42)    12,600.00 Foreign Exchange Currency Gain/Loss A/c          900.00 To Cash A/c (30000*0.45)    13,500.00 Dec-31 Inventory A/c( (0.47-0.42)*13500)          675.00 Accounts Receivable A/c ((0.47-0.43)*9000)          360.00 To Foreign Exchange Currency Gain/Loss A/c          285.00 To Accounts Payable (0.47-0.42)*15000          750.00 2016 Feb-01 Cash A/c (9000*0.49)      4,410.00 To Accounts Receivable A/c (0.47*9000)      4,230.00 To Foreign Exchange Currency Gain/Loss A/c          180.00 Mar-01 Accounts Payable A/c (15000*0.47)      7,050.00 Foreign Exchange Currency Gain/Loss A/c          300.00 To Cash A/c (15000*0.49)      7,350.00 Inventory Purchased    45,000.00 Sold    31,500.00 Balance    13,500.00 Accounts Payable Purchased 45000.00 Paid 30000.00 Balance 15000.00 Accounts Receivable Sales 45000 Money received 36000 Balance 9000

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