HW 1 of 11 Score: 0 of 1 pt E11-18A (similar to hese transactions for Hard Wiee.

Question

HW 1 of 11 Score: 0 of 1 pt E11-18A (similar to hese transactions for Hard Wiee. Focus on the gaine and losses caused by changes in foreign-cumency rales Round your answers to the nearest whole dolar 1. Journaliane these tranactions for Hard Wine. Foous on the gains and loeses caused by changes in forelgn ury rates Round your answers to the nearest whole dollar (Reoord deits frst, then from any jpumal entries) un Purchased varous nventory tems on account tom Mooshu Japanese company The price was 400,000 yen, and heexchange ate of the yen was 50.0091 Debit Jun

Explanation / Answer

1. Journal

2. After purchase of inventory, Hard Wire wanted dollar to be strengthened. After sale, Hard wire wanted euros to be strengthened. In case of purchase, the outgoing currency will carry less amount of dollars if the dollar is strengthened and hence less amount of dollars will be required to settle the creditors' claim. In case of sale, the incoming currency will carry more amount of dollars if the euros is strengthened and hence more amount of dollars will get realized due to this settlement.

Date Account Name Debit Credit Jun 9 Inventory (400000 x $0.0091) 3640 Accounts payable 3640 Jul 18 Accounts payable 3640 Foreign exchange difference 640 Cash (400000 x $0.0075) 3000 Jul 22 Accounts receivable (90000 x $1.24) 111600 Sales revenue 111600 Jul 28 Cash (90000 x $1.19) 107100 Foreign exchange difference 4500 Accounts receivable 111600

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