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    2-Transactions Adjusted On Installments During More Than One Accounting Period: Ex 9

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    mohamed abbas
    The document describes a transaction where a Jordanian company exported goods to a Saudi company for $1,000,000 to be paid in two equal installments one month and four months after the export date. It asks to record the journal entries in the exporter and importer's accounts and show the effect on accounts receivable, accounts payable, and profit and loss accounts under different accounting period scenarios and changing exchange rates between the Jordanian dinar and Saudi riyal against the US dollar.

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    2-Transactions Adjusted On Installments During More Than One Accounting Period: Ex 9

    Uploaded by

    mohamed abbas
    18 views3 pages
    The document describes a transaction where a Jordanian company exported goods to a Saudi company for $1,000,000 to be paid in two equal installments one month and four months after the export date. It asks to record the journal entries in the exporter and importer's accounts and show the effect on accounts receivable, accounts payable, and profit and loss accounts under different accounting period scenarios and changing exchange rates between the Jordanian dinar and Saudi riyal against the US dollar.

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    ex 9

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    The document describes a transaction where a Jordanian company exported goods to a Saudi company for $1,000,000 to be paid in two equal installments one month and four months after the export date. It asks to record the journal entries in the exporter and importer's accounts and show the effect on accounts receivable, accounts payable, and profit and loss accounts under different accounting period scenarios and changing exchange rates between the Jordanian dinar and Saudi riyal against the US dollar.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views3 pages

    2-Transactions Adjusted On Installments During More Than One Accounting Period: Ex 9

    Uploaded by

    mohamed abbas
    The document describes a transaction where a Jordanian company exported goods to a Saudi company for $1,000,000 to be paid in two equal installments one month and four months after the export date. It asks to record the journal entries in the exporter and importer's accounts and show the effect on accounts receivable, accounts payable, and profit and loss accounts under different accounting period scenarios and changing exchange rates between the Jordanian dinar and Saudi riyal against the US dollar.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    2-Transactions adjusted on installments during more than one accounting

    period :
    Ex 9 :
    On 1/10/2018 one of the Jordan companies exported goods to a Saudi company for 1.000.000 $
    and agreed to adjust the value of these goods on two equal installments, the first accrued one
    month after the exporting date, and the second accrued four months after the same date.
    Required:
    1- Journal Entries in the records of both the exporter and the importer.
    2- Show the A/R a/c A/P a/c, and the P.-L. change in the exchange rate if:
    a- The accounting pried of both the exporter and the importer ended 31/12
    b- The accounting period of the exporter ended 31/12, while for the importer ended 30/6
    c- The accounting period of the exporter ended 30/6 while for the importer ended 31/12.
    The following the exchange rate of the American dollar for the Jordan diner and Saudi riyal:

    Date Jordan diner Saudi riyal

    01/10/2018 0.705 3.70


    01/11/2018 0.703 3.75
    31/12/2018 0.708 3.85
    01/02/2019 0.707 3.80
    20/06/2019 0.709 3.90
    ANSWER
    In the exporter's records
    Value of goods = 1,000,000 × 0.705 = 705,000
    500,000 × 0.705 = 352,500

    1/10 A / R – Saudi Co. 705,000


    Sales-foreign currency 705,000
    1/11 value of installment = 500,000 × 0.703 = 351,500

    Cash 351,500
    P-L change in exchange rate 1,000
    A/R – Saudi Co. 352,500

    31/12 500,000 × 0.708 = 354,000

    31/12 A/R 1,500


    P-L change in exchange 1,500
    rate

    31/12 P-L change in exchange rate 500


    Income summary 500
    P-L change in
    Dr. exchange rate Cr.

    Cash 1,000 A/R 1,500


    Income
    Summary 500

    1,500 1,500

    1/2 /2019
    500,000 × 0.707 = 353,500

    Cash 353,500
    P-L change in exchange 500
    A/R 354,000

    Dr. A/R a/c Cr.

    Sales 705,000 cash 352,500


    P-L Ch. 1,500
    1,500 1,500

    31/12/2019
    Income summary 500
    P-L change in exchange
    rate 500

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