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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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On March 1, Friedle Import-Export Company sells merchandise costing 75,000 Mexican pesos. Payment will be made in pesos, on June 1. The exchange rates of pesos for $1 were as follows:

Chapter 13, Problem 33BEB, On March 1, Friedle Import-Export Company sells merchandise costing 75,000 Mexican pesos. Payment

Round all answers to the nearest dollar.

Required:

  1. 1. What is the receivable in dollars on March 1?
  2. 2. What is the dollar value of the amount paid in pesos on June 1?
  3. 3. If Friedle is paid on June 1, is there an exchange gain or loss? If so, how much is it?

1.

To determine

Compute the amount of liability on 1st March.

Explanation

Exchange Rate:

Exchange rate is a rate at which currencies of two countries can be exchanged. Exchange rates can be quoted directly or indirectly.

Computation of liability as on 1st March:

ParticularsAmount ($)
Amount receivable in MP75,000
Rate of exchange per $10...

2.

To determine

Compute the amount receivable on 1st June.

3.

To determine

Compute gain or loss in case amount is received on 1st June.

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