Plymouth Corporation (a U.S. company) began operations on September 1, 2014, when the owner borrowed $250,000 to establish the business. Plymouth then had the following import and export transactions with unaffiliated Chinese companies:
September 6, 2014 Bought material inventory for 100,000 yuan on account. Invoice denominated in yuan
September 18, 2014 Sold 80% of inventory acquired on 9/6/14 for 110,000 yuan on account. Invoice denominated in yuan
October 5, 2014 Acquired and paid the 100,000 yuan owed to the Chinese supplier
October 18, 2014 Collected the 110,000 yuan from the Chinese customer and immediately converted them into U.S. dollars
The following exchange rates apply:
Required:
1. What were Sales in the September month-end income statement?
2. What was the COGS associated with these sales?
3. What is the Accounts Receivable balance in the balance sheet at September 30, 2014?
4. What is the Inventory balance in the balance sheet at September 30, 2014?
5. What is the Exchange gain or loss that will be reported for the month of September?

Question

Plymouth Corporation (a U.S. company) began operations on September 1, 2014, when the owner borrowed $250,000 to establish the business. Plymouth then had the following import and export transactions with unaffiliated Chinese companies:
September 6, 2014 Bought material inventory for 100,000 yuan on account. Invoice denominated in yuan
September 18, 2014 Sold 80% of inventory acquired on 9/6/14 for 110,000 yuan on account. Invoice denominated in yuan
October 5, 2014 Acquired and paid the 100,000 yuan owed to the Chinese supplier
October 18, 2014 Collected the 110,000 yuan from the Chinese customer and immediately converted them into U.S. dollars
The following exchange rates apply:
  Required:
1. What were Sales in the September month-end income statement?
2. What was the COGS associated with these sales?
3. What is the Accounts Receivable balance in the balance sheet at September 30, 2014?
4. What is the Inventory balance in the balance sheet at September 30, 2014?
5. What is the Exchange gain or loss that will be reported for the month of September?

Quizplus · Accepted Answer

The Answer of Plymouth Corporation (a U.S. company) began operations on September 1, 2014, when the owner borrowed $250,000 to establish the business. Plymouth then had the following import and export transactions with unaffiliated Chinese companies:
September 6, 2014 Bought material inventory for 100,000 yuan on account. Invoice denominated in yuan
September 18, 2014 Sold 80% of inventory acquired on 9/6/14 for 110,000 yuan on account. Invoice denominated in yuan
October 5, 2014 Acquired and paid the 100,000 yuan owed to the Chinese supplier
October 18, 2014 Collected the 110,000 yuan from the Chinese customer and immediately converted them into U.S. dollars
The following exchange rates apply:
  Required:
1. What were Sales in the September month-end income statement?
2. What was the COGS associated with these sales?
3. What is the Accounts Receivable balance in the balance sheet at September 30, 2014?
4. What is the Inventory balance in the balance sheet at September 30, 2014?
5. What is the Exchange gain or loss that will be reported for the month of September?

Plymouth Corporation (A U