- $15 loss is the answer
Solution:
Given,
The exchange rate is $2.00 = pound £1
The exchange rate is $1.50 = pound£1
You pay pound£45 ($90)
Now.
Buy ( $2.00 x 45 pounds = $90)
Sell ($1.50 x 50 pounds = $75)
=> $75 - $90 = - $15 loss
Answer:
Debit Asset Improvement account $105,000
Credit Cash account $105,000
Being entries to record cost of modernization of store.
Explanation:
The cost of the modernization is a cost that will be capitalized with the cost of the store as an asset. When an asset is purchased for cash, the adjusting entries required are;
Debit Fixed asset account
Credit Cash account
The modernization will be recognized in the Asset improvements account hence the debit entry will be posted there while the corresponding credit will go to cash account.
