A U.S. company takes delivery of goods from a supplier in Hong Kong on December 1, 2020, at an invoice price of HK$100,000. The company purchases Hong Kong dollars in the spot market and pays the supplier on March 1, 2021. The U.S. company has a December 31 year-end. Spot rates ($/HK$) are as follows:
$$\begin{array} { | l | c | }
\hline & \text { Spot Rate } \
\hline \text { December 1, 2020 } & \$ 0.128 \
\hline \text { December 31, 2020 } & 0.126 \
\hline \text { March 1, 2021 } & 0.130 \
\hline
\end{array}$$ Required :Prepare the U.S. company's journal entries to record these events.

Question

A U.S. company takes delivery of goods from a supplier in Hong Kong on December 1, 2020, at an invoice price of HK$100,000. The company purchases Hong Kong dollars in the spot market and pays the supplier on March 1, 2021. The U.S. company has a December 31 year-end. Spot rates ($/HK$) are as follows:
 $$\begin{array} { | l | c | } 
\hline & \text { Spot Rate } \
\hline \text { December 1, 2020 } & \$ 0.128 \
\hline \text { December 31, 2020 } & 0.126 \
\hline \text { March 1, 2021 } & 0.130 \
\hline
\end{array}$$ Required :Prepare the U.S. company's journal entries to record these events.

Quizplus · Accepted Answer

The Answer of A U.S. company takes delivery of goods from a supplier in Hong Kong on December 1, 2020, at an invoice price of HK$100,000. The company purchases Hong Kong dollars in the spot market and pays the supplier on March 1, 2021. The U.S. company has a December 31 year-end. Spot rates ($/HK$) are as follows:
 $$\begin{array} { | l | c | } 
\hline & \text { Spot Rate } \
\hline \text { December 1, 2020 } & \$ 0.128 \
\hline \text { December 31, 2020 } & 0.126 \
\hline \text { March 1, 2021 } & 0.130 \
\hline
\end{array}$$ Required :Prepare the U.S. company's journal entries to record these events.

A US Company Takes Delivery of Goods from a Supplier in in Hong