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On January 1,2013,Canadian Music International (CMI),a manufacturer of high-end recording equipment based in Toronto,shipped $120,000 worth of inventory to its main U.S.distributor in Chicago,with full payment of these goods to be paid by February 28,2013.CMI has a January 31 year end.A list of significant dates and exchange rates is shown below. The invoice price billed by CMI was $120,000 U.S.
-At what value did CMI record the initial sale to its American distributor?

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The following information pertains to questions 
On January 1,2013,Canadian Music International (CMI),a manufacturer of high-end recording equipment based in Toronto,shipped $120,000 worth of inventory to its main U.S.distributor in Chicago,with full payment of these goods to be paid by February 28,2013.CMI has a January 31 year end.A list of significant dates and exchange rates is shown below.  The invoice price billed by CMI was $120,000 U.S.
-At what value did CMI record the initial sale to its American distributor?

Quizplus · Accepted Answer

The initial sale was billed in U.S. dollars at a price of $120,000. However, since CMI is a Canadian company, they would have recorded the sale in Canadian dollars on their books at the date of sale. To determine the value in Canadian dollars, we need to convert $120,000 U.S. to Canadian dollars using the exchange rate at the date of sale. From the chart, we can see the exchange rate on January 1, 2013 was 1.1418.

$120,000 U.S. x 1.1418 = $136,920 CDN

Therefore, the initial sale was recorded at a value of $136,920 CDN.

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