Exercise 15-16A Foreign currency transactions LO C3 Leigh of New York sells its

Question

Exercise 15-16A Foreign currency transactions LO C3 Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2017, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 15,000 pounds. The exchange rate on that day for £1 was $20513. On December 31, 2017, when Leigh prepared its financial statements, the rate was £1 for $2.0451. Bronson paid its billinful on January 15, 2018, at which time the exchange rate was S1 for $2.0472. Leigh immediately exchanged the 15,000 pounds for US. dollars. Prepare Leigh's journal entries on December 16, December 31, and January 15. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Journal entry worksheet On December 16, 2017, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 15,000 pounds. The exchange rate on that day for £1 was $2.0513 al

Explanation / Answer

16.12.2017 Sold Goods on Credit 15000 pounds exc rate = $2.0513/£ 31.12.2017 exc rate = $2.0451/£ 15.12.2018 Debto realised 15000 pounds exc rate = $2.0472/£ 16.12.2017 Accounts Receivable - Bonson Ltd 30769.5 [15000 pound*$2.0513 Sales 30769.5 31.12.2017 Foreign Exchange Loss 93 [15000 pound*($2.0513-$2.0451) Accounts Receivable - Bonson Ltd 93 15.12..2018 Cash A/c 30708 [15000 pound*$2.0472) Accounts Receivable - Bonson Ltd 30676.5 [15000 pound*$2.0451) Foreign Exchange Gain 31.5 [15000 pound*($2.0472-$2.0451)

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