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Compute transactions gain or loss on unsettled receivable

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Question - Agentel Corporation is a U.S. -based importing-exporting company. The company entered into the following transactions during the month of November.

Nov. 6 Purchased merchandise from AGT, a Swiss firm, for 600,000 francs.

Nov. 5 Sold merchandise to SLS Inc, a firm located in rio De Janeiro, for $200,000.

Nov. 18 Sold merchandise to TNT, Ltd., a British firm, for 130,000 pounds.

Nov. 20 Purchased merchandise from SDS, Ltd., a British firm, for $160,000.

All the transactions were unsettled at December 31, Agentel's fiscal year-end. Spot rates are as follows:

Currency

Date Franc Real Pound

November 6 $.490 $.412 $1.520

November 15 $.487 $.409 $1.509

November 18 $.476 $.414 $1.506

November 20 $.468 $.405 $1.498

November 31 $.460 $.398 $1.482

A. Compute the amount that Agentel would report for each unsettled receivable and payable in its balance sheet prepared at December 31.

B. Compute the transactions gain or loss on each unsettled receivable and payable that would be reported in the income statement prepared for the year ended December 31.

Reference no: EM131813484

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