Jake International (a US Company) both buys and sells merchandise to foreign cor

Question

Jake International (a US Company) both buys and sells merchandise to foreign corporations. During the month of February 2013, Jake entered into the following transactions with its suppliers and customers overseas. Jake uses a periodic inventory system. (HINTS: Is a direct or indirect exchange quotation being use? What currency is the transaction denominated in?)

      February 2        Purchased merchandise on account from a manufacturer in Mexico, at a cost of 350,000 pesos. The exchange rate at the time was 9.35 pesos per US$

                     5        Sold merchandise for $50,000 to a customer in Germany. The euro was worth $0.95 at the time.

                   10        Sold merchandise for 7,250,000 yen to a customer in Japan. The exchange rate was 104 yen per US$

                   15        Bought merchandise from a supplier in Canada invoiced for $15,000 US$. The exchange rate was $0.678 per Canadian dollar

                   20        Paid the Mexican manufacturer when the exchange rate was 9.40 pesos per US$

                   24        Received payment from the Japanese customer when the exchange rate was 102 yen per US$

                   26        Paid the Canadian supplier

                   27        Received payment from the German customer

                 28        Purchased merchandise on account from a customer in France. The invoice was for 47,500 euro. The euro was worth $0.98 at that time.

REQUIRED - Prepare journal entries for the transactions above. Round to the nearest dollar. You have 40 lines to record your answer. You do not need to show your calculations. Make sure I am able to determine if the account is being debited or credited.

Explanation / Answer

Ans-

Journal 350,000/9.35 = 37.433 Feb. 2 Purchases 37,433.00             Accounts payable          37.43 Feb. 5 Accounts receivable 50,000.00             Sales 50,000.00 7250,000/104 = 69,711 Feb. 10 Accounts receivable 69,712.00             Sales 69,712.00 Feb. 15 Purchases 15,000.00             Accounts payable 15,000.00 350000/9.4 Feb. 20 Accounts payable 37,433.00             Cash 37,433.00 Feb. 24 Cash 71,078.00 Trasanction Gain     1,366.00             Accounts receivable 69,712.00 Feb. 26 Accounts payable 15,000.00             Cash 15,000.00 Feb. 27 Cash 50,000.00             Accounts receivable 50,000.00 47,500/.98 Feb. 28 Purchases 48,469.00             Accounts payable 48,469.00

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