An American company Pete Inc. sold its inventory to Ping Pte. ltd for $20,000 Si
ID: 2437417 • Letter: A
Question
An American company Pete Inc. sold its inventory to Ping Pte. ltd for $20,000 Singapore dollars (SGD). and to satriaTbk. For 300,000,000 rupiah on December 1,2014 when the spot rate for SGD is $0.798 baht, when the spot rate for baht is $0.031. Pete closed its books on December 31,2014 and collected the total sale and settlement amount on January 15,2015. Spot rates are given as follows:
Dec 31,2014 Jan 15,2015
Singaporean Dollars $0.76 $0.802
Indonesian Rupiah $0.0000911 $0.0000805
Thai Baht $0.029 $0.0318
Required: prepare the required journal entries to account for the transaction above .
Explanation / Answer
since the conversion rates of rupiah is not given on the day of sale it is assumed to be $ 0.0000911. the student can assume the correct rate and make changes accordingly.
On Purchase: Ping Pte limited Dr. 15,960.00 to Sales 15,960.00 (Conversion rate @ 0.798) Satria Tbk Dr. 27,330.00 To Sales 27,330.00 (Conversion rate 0.000091 per $) On B/s Date: Loss on Currency change Dr. 760.00 To Ping Pte Limited 760.00 On Date of Realisation; Bank Account Dr. 16,040.00 To Ping Pte Ltd 15,200.00 To Gain on realisation 840.00 Bank Account Dr. 24,150.00 Loss on realisation Dr. 3,180.00 TO Satria Tbk 27,330.00