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AE120 - Final Activity 1

The document provides three examples requiring journal entries for foreign currency transactions. The first example asks to compute the net monetary items for accounts with various balances in different currencies. The second asks for journal entries in 20x1 and 20x2 for an order paid in a foreign currency, with given spot exchange rates on the invoice and payment dates. The third provides an order paid in a different foreign currency, with spot rates on the sale date and year-end, and asks for journal entries in the two periods.

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273 views1 page

AE120 - Final Activity 1

The document provides three examples requiring journal entries for foreign currency transactions. The first example asks to compute the net monetary items for accounts with various balances in different currencies. The second asks for journal entries in 20x1 and 20x2 for an order paid in a foreign currency, with given spot exchange rates on the invoice and payment dates. The third provides an order paid in a different foreign currency, with spot rates on the sale date and year-end, and asks for journal entries in the two periods.

Uploaded by

Krystal shane
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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AE120 – Final Activity 1

1. An entity has the following accounts and their balances:

Requirement: Compute for the net monetary items.

2. On November 15, 20x1, Lemon Co. ordered merchandise, on an FOB shipping point term,
from a foreign entity for 200,000 marks. The merchandise was shipped and invoiced to
Lemon on December 10, 20x1. Lemon paid the invoice on January 10, 20x2. The spot rates
are as follows:

Requirement: Provide the journal entries in 20x1 and 20x2.

3. On September 1, 20x1, Creed Co. sold merchandise to a foreign entity for 250,000 francs.
Terms of the sale require payment in francs on February 1, 20x2. On September 1, 20x1,
the spot exchange rate was P1.20 per franc. At December 31, 20x1, the spot rate was P1.19,
but the rate increased to P1.22 by February 1, 20x2, when payment was received.

Requirement: Provide the journal entries in 20x1 and 20x2.

Prepared by:

Donald P. Sam-it
Faculty, College of Accountancy
University of the Cordilleras

Reference: Millan, Z. V. Accounting for Business Combinations (Advanced Accounting 2). Baguio: Bandolin Enterprise, © 2020

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