Required information SB Coyote Corp. (a U.S. company in Texas) had the... Coyote

Question

Required information SB Coyote Corp. (a U.S. company in Texas) had the... Coyote Corp. (a U.S. company in Texas) had the following series of transactions in a foreign country during 2018 Mar.1 Bought inventory costing 60,000 pesos on credit. May 1 Sold 60% of the inventory for 54,000 pesos on credit. Aug.1 Collected 48,000 pesos from customers Sept.l Paid 36,000 pesos to creditors The appropriate exchange rates during 2018 were as follows Date March 1, 2018 May 1, 2018 August 1, 2018 September , 2018 December 31, 2018 Exchange Rate $.201 peso $.22 = 1 peso $.231 peso $.24 1 peso $.25-1 peso MC Qu. 89 What amount will Coyote Corp. report in its 2018... What amount will Coyote Corp. report in its 2018 balance sheet for Inventory?

Explanation / Answer

In the above case as per US GAAP Accounting standard for valuation of inventory, the inventory would be recorded at the cost or net realizable value whichever is lower on its purchase.

Further there would be no changes in inventory valuation expect in case the inventory turns to be obselete(non-moving or damaged)

Hence in the above case the inventory valuation as on March 2018 would be as under:

       Units    Rs.

Purchase:              60,000            12000

Less-Sold      (36,000)                  (7200)

(60%)

Amount of inventory    24000      4800

As on 2018

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