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dmitriy555 [2]
2 years ago
8

A U.S. company purchased inventory on account at a cost of 1,000 foreign currency units (FCU) from a non‐U.S. company on Novembe

r 15, to be paid on December 15. The FCU is valued at $0.85 on November 15 and at $0.90 on December 15. The journal entry to record payment on December 15 should include which of the following?A. Debit inventory and credit cash for $850.B. Debit accounts payable and credit exchange gains and losses for $50.C. Debit accounts payable and credit cash for $850.D. Debit exchange gains and losses and credit accounts payable for $50.
Business
1 answer:
Alecsey [184]2 years ago
4 0

Answer:

D. Debit exchange gains and losses and credit accounts payable for $50.

Explanation:

0.85 FCU = 1 dollar

1,000 x 0.85 = 850

0.90 FCU = 1 dollar

1,000 x .90 = 900

exchange 850 -900 = -50 = loss 50

<em>november 15</em>

inventory 850

 account payable 850

<em>december 15</em>

exchange gans and losses 50 debit

account payable 50 credit

<em>december 15</em>

account payable 900 debit

     cash 900 credit

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