Assignment Choice: Sale Journal Entries
Garden Grove Corporation made a sale to a foreign customer on September 15, Year 1, for 100,000 foreign currency units (FCU). Payment was received on October 15, Year 1. The following exchange rates apply:
Date U.S. Dollar per FCU
September 15, Year 1 . . . . . . . . $0.40
September 30, Year 1 . . . . . . . . . 0.42
October 15, Year 1 . . . . . . . . . . 0.37
Using Excel, prepare all journal entries for Garden Grove Corporation in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements.
In addition, write a 1-page response to the following questions:
• Why do currency differences affect foreign exchange reporting?
• What difference has the introduction of comprehensive income statements made to U.S. accounting for foreign exchange?
• Why do you think it has been so difficult for accounting regulators to deal with accounting for foreign exchange over the last 25 years?
Insert your Excel spreadsheet into your Word document so that you only have one document to submit. Support your statements with a minimum of two sources in addition to your textbook.