An American company Pete Inc. sold its inventory to Ping Pte. ltd for $20,000 Si

Question

An American company Pete Inc. sold its inventory to Ping Pte. ltd for $20,000 Singapore dollars (SGD). and to satriaTbk. For 300,000,000 rupiah on December 1,2014 when the spot rate for SGD is $0.798 baht, when the spot rate for baht is $0.031. Pete closed its books on December 31,2014 and collected the total sale and settlement amount on January 15,2015. Spot rates are given as follows:

Dec 31,2014 Jan 15,2015

Singaporean Dollars $0.76 $0.802

Indonesian Rupiah $0.0000911 $0.0000805

Thai Baht $0.029 $0.0318

Required: prepare the required journal entries to account for the transaction above .

Explanation / Answer

since the conversion rates of rupiah is not given on the day of sale it is assumed to be $ 0.0000911. the student can assume the correct rate and make changes accordingly.

On Purchase: Ping Pte limited   Dr. 15,960.00 to Sales               15,960.00 (Conversion rate @ 0.798) Satria Tbk Dr. 27,330.00 To Sales               27,330.00 (Conversion rate 0.000091 per $) On B/s Date: Loss on Currency change Dr.        760.00 To Ping Pte Limited                     760.00 On Date of Realisation; Bank Account Dr. 16,040.00 To Ping Pte Ltd               15,200.00 To Gain on realisation                     840.00 Bank Account Dr. 24,150.00 Loss on realisation Dr.     3,180.00 TO Satria Tbk               27,330.00

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