Norton Co., a U.S. corporation, sold inventory on December 1, 2011, with payment of 10,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: For what amount should Sales be credited on December 1?

Question

Norton Co., a U.S. corporation, sold inventory on December 1, 2011, with payment of 10,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows:  For what amount should Sales be credited on December 1?

Quizplus · Accepted Answer

To determine the amount of sales to be credited on December 1, we need to convert the sale from British pounds to US dollars using the exchange rate on that day. According to the given exchange rate, 1 pound = $1.7241.

So, the sale of 10,000 pounds is worth:

10,000 pounds x $1.7241/pound = $17,241

Therefore, sales should be credited for $17,241 on December 1. Option D is the correct answer.

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