The following information refers to questions
On July 1,2012 CDN purchased inventory from its main U.S.supplier RNB Enterprises at a cost of $1,000 U.S dollars.CDN's year end is on July 31.
Some important dates regarding this transaction,as well as the exchange rates in effect at each of these dates are shown below:
-What was the amount paid to RNB by CDN at the settlement date?
The one-transaction method was dropped according to an earlier version of the text around 2005.

Question

The following information refers to questions 
On July 1,2012 CDN purchased inventory from its main U.S.supplier RNB Enterprises at a cost of $1,000 U.S dollars.CDN's year end is on July 31.
Some important dates regarding this transaction,as well as the exchange rates in effect at each of these dates are shown below: 
-What was the amount paid to RNB by CDN at the settlement date?
The one-transaction method was dropped according to an earlier version of the text around 2005.

Quizplus · Accepted Answer

To determine the amount paid by CDN at the settlement date, we need to convert the cost of inventory in U.S dollars to CDN dollars using the exchange rates provided.

On July 1, 2012: 
Cost of inventory = $1,000 USD 
Exchange rate = 1 USD = 1.015 CAD 
Cost of inventory in CDN dollars = 1,000 USD x 1.015 CAD/USD = 1,015 CDN

On July 31, 2012: 
Exchange rate = 1 USD = 1.028 CAD 
Amount paid in CDN dollars = 1,015 CDN x 1.028 CAD/USD = 1,043.02 CDN

Therefore, the amount paid by CDN to RNB at the settlement date was $1,043.02 CDN, which is closest to option D ($805 CDN).

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