Homework SourseA US company sells items abroad Daisy prices many of these t
A U.S. company, sells items abroad. Daisy prices many of these transactions in the currency of the customer. Following are four such transactions made in the last accounting period, plus the direct exchange rates for each date:
Prepare the journal entries made by Daisy Brands to record the above sale and collection transactions.
| Country | Amount | Currency | Spot Rate at Sale | Spot Rate at Collection |
|---|---|---|---|---|
| Argentina | 250,000 | Peso | $0.118 | $0.121 |
| Canada | 400,000 | Dollar | 0.932 | 0.954 |
| India | 300,000 | Rupee | 0.016 | 0.013 |
| South Africa | 100,00 | Rand | 0.091 | 0.087 |
Solution
Journal Entries :-
| Date | Particulars | Debit($) | Credit($) |
| Argentina:- | |||
| Accounts Receivable A/c Dr. | 29500 | ||
| To Sales Revenue A/c (250000*$0.118) | 29500 | ||
| Cash A/c Dr. (250000*$0.121) | 30250 | ||
| To Accounts Receivable A/c | 29500 | ||
| To Foreign Exchange Gain A/c | 750 | ||
| Canada:- | |||
| Accounts Receivable A/c Dr. | 372800 | ||
| To Sales Revenue A/c (400000*$0.932) | 372800 | ||
| Cash A/c Dr. (400000*$0.954) | 381600 | ||
| To Accounts Receivable A/c | 372800 | ||
| To Foreign Exchange Gain A/c | 8800 | ||
| India :- | |||
| Accounts Receivable A/c Dr. | 4800 | ||
| To Sales Revenue A/c (300000*$0.016) | 4800 | ||
| Cash A/c Dr. (300000*$0.013) | 3900 | ||
| Foreign Exchange Loss A/c Dr. | 900 | ||
| To Accounts Receivable A/c | 4800 | ||
| South Africa :- | |||
| Accounts Receivable A/c Dr. | 9100 | ||
| To Sales Revenue A/c (100000*$0.091) | 9100 | ||
| Cash A/c Dr. (100000*$0.087) | 8700 | ||
| Foreign Exchange Loss A/c Dr. | 400 | ||
| To Accounts Receivable | 9100 |
