Computing and Settling Acts Receivable in Foreign Currency
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Prepare journal entries for the following:
Items sold for 60,000 Singapore Dollars. The exchange rate on December 20 was $0.476 per Singapore Dollar. The purchase terms were n/30.
On December 31 the exchange rate was $0.480 per Singapore Dollar.
On January 17 payment was received for the December 20 sale. The exchange rate was $0.495 per Singapore Dollar.
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Solution Summary
This solution illustrates the journal entries made when a sale is made in a foreign currency, the accounts receivable account is adjusted at year-end for the currency translation, and the account is settled in foreign currency.
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12/20 Accounts Receivable 28,560 (SGD 60,000*SGD 1/$.476)
Sales 28,560
To record a sale ...
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