Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09:1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Description Date 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable + ✔ ✔ ÷ ✓ ÷ ✓ : ✔ x Debit 250,000 x 0✔ 10,000 x 0✔ 277,500✔ 0✓ 0✔ Credit 250,000 x 05 10,000 x 0✔ 277,500 x 0

Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09:1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Description Date 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable + ✔ ✔ ÷ ✓ ÷ ✓ : ✔ x Debit 250,000 x 0✔ 10,000 x 0✔ 277,500✔ 0✓ 0✔ Credit 250,000 x 05 10,000 x 0✔ 277,500 x 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Journal entries for an accounts receivable denominated in Swiss Francs ($US strengthens and weakens) Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09:1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Date Description Credit 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable → ✓ ✓ ✓ + → ✔ ✓ → Debit 250,000 x 0 ✓ 10,000 * 0✔ 277,500✔ 0✓ 0✔ 0✔ 250,000 * 0✔ 10,000 x 0 ✓ 277,500 * 0 x
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