Acme Corporation (a U.S. company located in Sarasota, Florida) has the following

Question

Acme Corporation (a U.S. company located in Sarasota, Florida) has the following import/export transactions in 2015: March 1 May 1 August 1 September 1 Bought inventory costing 55,000 pesos on credit. Sold 70 percent of the inventory for 50,000 pesos on credit. Collected 42,500 pesos from customers Paid 32,500 pesos to creditors. Currency exchange rates for 1 peso for 2015 are as follows March 1 May 1 August 1 September 1 December 31 $0.14 0.15 0.16 0.17 0.18 Assume that all receipts were converted into dollars as soon as they were received For each of the following accounts, how much will Acme report on its 2015 financial statements? a. Inventory b. Cost of goods sold C. Sales d. Accounts receivable e. Accounts payable f. Cash

Explanation / Answer

Answer

$ a. Inventory ( 55,000 pesos x 30%) x $ 0.14 2310 b. Cost of Goods Sold ( 55,000 pesos x 70%) x $ 0.14 5390 c. Sales ( 50,000 x $ 0.15) 7500 d. Accounts Receivable ( 10,000 pesos x $ 0.18) 1800 e. Accounts Payable ( 22500 pesos x $ 0.18) 4050 f. Cash ( 42500 x $ 0.16 - 32500 x $ 0.17) 1275

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