Palmerstown Company Essay

1033 Words Mar 24th, 2013 5 Pages
Case 8-2 Palmerstown Company Exchange Rates | $/pound | January 1, Year 1 | 1.00 | January 1-31, Year 1 | 1.00 | Average Year 1 | 0.90 | When inventory purchases made | 0.86 | When ending inventory acquired | 0.83 | December 31, Year 1 | 0.80 | 1. Pound is the functional currency – Current rate method | | Exchange | | | Pounds | Rate | U.S. $ | Sales | 15,000 | 0.900 | 13,500 | Cost of goods sold | (9,000) | 0.900 | (8,100) | Gross profit | 6,000 | | …show more content…
$ | Purchase, January 10 | 1,000 | 1.000 | 1,000 | Additional purchases | 12,000 | 0.860 | 10,320 | Ending inventory | (4,000) | 0.830 | (3,320) | Cost of goods sold | 9,000 | | 8,000 |

Calculation of Remeasurement Gain | | Exchange | | | Pounds | Rate | U.S. $ | Net monetary assets, 1/1/Y1 | 8,000 | 1.000 | 8,000 | Increase in monetary assets: | | | | Sales | 15,000 | 0.900 | 13,500 | Decrease in monetary assets: | | | | Acquisition of beginning inventory | (1,000) | 1.000 | (1,000) | Purchase of inventory during year | (12,000) | 0.860 | (10,320) | Selling and administrative

More about Palmerstown Company Essay