Foreign Currency Transactions
Charles & Sons, a U.S. computer supplies firm, had the following transactions with foreign companies during December 2007:
(a) Goldstar Co., Ltd., a South Korea–based firm, sold 5,000 computer hard Dr. ives to Charles & Sons for 100,000 won per Dr. ive on December 12, 2007. Charles & Sons paid the bill on January 13, 2008.
(b) Charles & Sons sold 2,000 computer hard Dr.ives to a Swiss firm, Lockner Inc., on December 21, 2007. Lockner Inc. agreed to pay $135 per hard Dr. ive. Payment was received by Charles & Sons on February 4, 2008.
(c) Charles & Sons sold 2,400 computer hard Dr.ives to Geopacific, Inc., a company with headquarters in Canada, on December 28, 2007. Geopacific was billed 148 Canadian dollars per Dr.ive. Payment was received on January 10, 2008.
(d) Charles & Sons received 1,000 printers from Printco, a Japanese company, on December 28, 2007. Printco billed Charles & Sons 45,000 yen per printer. Charles & Sons paid the liability on January 14, 2008.
Exchange rates for the above transactions are as follows:
|
U.S. Dollar Value of 1 Unit of Foreign Currency |
|||
|
|
As of Date of Sale |
As of Balance |
As of Date of Payment |
|
|
or Purchase |
Sheet Date |
or Receipt |
|
South Korean won |
$0.00103 |
$0.00112 |
$0.00115 |
|
Swiss franc |
0.670 |
0.632 |
0.655 |
|
Canadian dollar |
0.910 |
0.935 |
0.905 |
|
Japanese yen |
0.0075 |
0.0069 |
0.0073 |
Instructions: Prepare the journal entries necessary for Charles & Sons to record each of the above transactions for the following: (1) date of the original transaction, (2) balance sheet date, and (3) date of payment or receipt of cash.