Question

Cassowary Corporation's balance sheet at December 31, 20x3 included a $20,400 account receivable from Quail Corporation...

Cassowary Corporation's balance sheet at December 31, 20x3 included a $20,400 account receivable from Quail Corporation of Australia. The account receivable was denominated as 30,000 Australian dollars (A$). What entry did Cassowary make on January 16, 20x3 when the account receivable was collected and the exchange are for A$ was $.67?

a.  

cash 20,100
accounts receivable 20,100

b.

cash 20,100
exchange loss 300
accounts receivable 2,400

c.

cash 20,400
accounts receivable 20,400

d.

cash 20,700
accounts receivable 20,400
exchange gain 300

Homework Answers

Answer #1

Solution: No options in the above question is correct.

The Exact answer is as follows:

Cash [30000*$0.67] $              20,100
Exchange Loss [Foreign Currency Transaction Loss] $                    300
Accounts receivables $              20,400
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