Assignment Details Accounting 310 American Intercontinental University Globalization is a continuous process whereby managers become aware of the...

Assignment Details

Accounting 310 American Intercontinental University

Globalization is a continuous process whereby managers become aware of the impact of international activities on their companies. This process takes place in stages that include exporting, licensing joint ventures, wholly owned subsidiaries, and global sourcing. Each stage has implications for the type of accounting information reported.

Striking Furs imports furs from Canada. In the space provided below, prepare journal entries to record the following events.

• Dec. 11, 2017: Purchased furs from Capable Trappers, Ltd., a Canadian corporation, at a price of 25,000 Canadian dollars, due in 60 days. The current exchange rate is $0.85 U.S. dollars per Canadian dollar. (Striking uses the perpetual inventory method; debit the Inventory account.)
• Dec. 31, 2017: Striking made a year-end adjusting entry relating to the account payable to Capable Trappers. The exchange rate at year-end is $0.89 U.S. dollars per Canadian dollar.
• Feb. 9, 2018: Issued a check for $21,750 (U.S. dollars) to National Bank in full settlement of the liability to Capable Trappers, Ltd. The exchange rate at this date is $0.87 U.S. dollars per Canadian dollar.

General Ledger in excel

2017

Dec11

Dec 31

2018

Feb 9

2. Explain ways in which Striking Furs can protect itself against the losses that would arise from a sudden increase in the foreign exchange rate.