Desi of New York sells its products to customers in the United States and the Un
ID: 2373423 • Letter: D
Question
Desi of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2011, Desi sold merchandise on credit to Bronson Ltd. of London at a price of 17,000 pounds. The exchange rate on that day for 1 lb was $1.5238. On December 31, 2011, when Desi prepared its financial statements, the rate was 1 lb for $1.4990. Bronson paid its bill in full on January 15, 2012, at which time the exchange rate was 1 lb for $1.5156. Desi immediately exchanged the 17,000 pounds for U.S. dollars. Prepare Desi's journal entried on December 16, December 31, and January 15 (round to the nearest dollar)
Explanation / Answer
Please mind this all is accordin to accounting standard 11
on16thdec2011
Bronson ltd A/C DR. 25904.6
To sales(merchandise) Cr. 25904.6
(merchandise being sold)
On 31dec
Exchange rate flauctuation A/c DR. $421.6
Bronson ltd A/c Cr. $421.6
On 15jan 12
Bronson ltd A/C DR. $282.2
Exchande rate flauctuation A/C Cr. $282.2
Cash A/c Dr. $25765.2
Bronson ltd A/c Cr. $25765.2
These entries all in converted rate you can do it in lb also depende on you
And this is the right way to do it.