1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar-equivalent value of $8,400 to be paid on June 20. The exchange rates were May 1 June 20 1 yen = $0.0070 1 yen = 0.0075 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,000, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were July 1 August 10 1 real = $0.20 1 real = 0.22 Required: a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. b. Assume that the two transactions are denominated in the applicable LCUs of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the LCUs of the Japanese company (yen) and the Brazilian customer (real).

1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar-equivalent value of $8,400 to be paid on June 20. The exchange rates were May 1 June 20 1 yen = $0.0070 1 yen = 0.0075 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,000, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were July 1 August 10 1 real = $0.20 1 real = 0.22 Required: a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. b. Assume that the two transactions are denominated in the applicable LCUs of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the LCUs of the Japanese company (yen) and the Brazilian customer (real).

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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