Advanced Accounting II

tiger1

USA Dog Coats had the following foreign transactions during 20X8:

USA Dog Coats purchased 5,000 zippers on December 2 from ZipIt, Inc., a firm based in Mexico, at an invoice price of 2,500 pesos. The spot rate was $0.069. Payment is due January 2, 20X9.
USA Dog Coats sold 700 dog coats on December 20 to Glorious Goldens, a pet shop in Canada, for $1,200 Canadian dollars. The spot rate was $0.815. The invoice is calculated in Canadian dollars and is due on January 20, 20X9.
On December 31, 20x8, the currency exchange rate for pesos was $0.073 and for Canadian dollars was $0.80.
The exchange rate for pesos on January 2, 20x9 was $0.0735, and the exchange rate for Canadian dollars on January 20, 20x9 was $0.810.

Prepare the following journal entries:

Prepare a journal entry for USA Dog Coats to reflect the above accounting events.
Prepare a journal entry for the adjusting journal entries necessary for December 31, 20x8.
Prepare a journal entry to record the payment of the invoice to ZipIt and to record the receipt of the Glorious Goldens' payment.

Provide a discussion of the following:

Explain the 3 stages of concern for accountants when dealing in foreign currency transactions.
What would be some example issues of these stages of concern if they were not properly addressed?

Please submit your assignment.

Grading Criteria
Create a journal entry for USA Dog Coats to reflect the accounting events described in the assignment.	20%
Create the adjusting journal entries necessary to December 31, 20x8.	20%
Create the journal entry to record the payment of the invoice to ZipIt and to record the receipt of the Glorious Goldens' payment.	20%
Explain the 3 stages of concern for accountants when dealing in foreign currency transactions. What would be some example issues of these stages of concern if they were not properly addressed?