Banana, Inc. is a U.S.-based manufacturer and wholesaler.  On 10/15/20x1, Banana made its first international sale.  They sold $450,000 of products to a non-U.S. customer. Banana, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC.  To avoid a penalty, the foreign buyer must make payment to Banana by February 2, 20x2.  At the time of the sale, the FC/$ spot rate was FC1.97=$1   Banana, Inc. has a December 31 year-end.  At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1. Required: Give the journal entries for the receipt of payment on the sale on 2/2/20x2. At that date, the foreign currency spot rate was FC 2.00 = $1.

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 13DQ
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Banana, Inc. is a U.S.-based manufacturer and wholesaler.  On 10/15/20x1, Banana made its first international sale.  They sold $450,000 of products to a non-U.S. customer. Banana, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC.  To avoid a penalty, the foreign buyer must make payment to Banana by February 2, 20x2.  At the time of the sale, the FC/$ spot rate was FC1.97=$1

 

Banana, Inc. has a December 31 year-end.  At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1.

Required:

  1. Give the journal entries for the receipt of payment on the sale on 2/2/20x2. At that date, the foreign currency spot rate was FC 2.00 = $1.
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