USA Dog Coats bought 5,000 zippers on 2nd December 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 2nd January, 20X9.
USA Dog Coats sold 700 dog coats on 20th December to Glorious Goldens, a pet shop in Canada, for $1,200 Canadian dollars. The spot rate was $0.815. The invoice is evaluated in Canadian dollars and is due on January 20, 20X9.
On 31st December, 20x8, the currency exchange rate for pesos was $0.073 and for Canadian dollars was $0.80. The exchange rate for pesos on 2nd January, 20x9 was $0.0735, and the exchange rate for Canadian dollars on 20th January, 20x9 was $0.810.
Prepare the subsequent journal entries:
Prepare a journal entry for USA Dog Coats to reflect the given accounting events.
Prepare a journal entry for the adjusting journal entries required for 31st December, 20x8.
Purpose 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 subsequent:
Describe the three stages of concern for accountants when dealing in foreign currency transactions.
What would be example issues of these stages of concern if they were not properly addressed?