This formatted MS Word file contains examples of foreign currency translations for Brisco Bricks and its foreign supplier, Bolivian Clay.
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Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows:
1. For what amount should Brisco's Accounts Payable be credited on May 8?
Since the spot (closing) price of the foreign currency was $1.25 on May 8th when the purchase was made, the entry to Brisco's Accounts Payable account should be $2,500,000 (2,000,000 (fc) x $1.25).
2.How much Foreign Exchange Gain or Loss should Brisco record on May ...
This formatted MS Word file contains examples of foreign currency translations.