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Marko Company sold spray paint equipment to Spain for 4,000,000 pesetas (P) on October 1, with...

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Accounting

Marko Company sold spray paint equipment to Spain for 4,000,000pesetas (P) on October 1, with payment due in six months. Theexchange rates were

October 1, 20X61 peseta=$0.0048
December 31, 20X61 peseta=0.0075
April 1, 20X71 peseta=0.0073


Required:
a. Did the dollar strengthen or weaken relative to the pesetaduring the period from October 1 to December 31? Did it strengthenor weaken between January 1 and April 1 of the next year?

b. Prepare all required journal entries for Marko as a result ofthe sale and settlement of the foreign transaction, assuming thatits fiscal year ends on December 31. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.)

Answer & Explanation Solved by verified expert
4.0 Ratings (680 Votes)
a Dollar has weakened during the period from October 1st to December 31 As it is evident from the exchange rate that the rate has been increased from 1peseta 00048 to 1 peseta 00075 which means peseta has strengthened during that period If peseta has strengthened    See Answer
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Transcribed Image Text

Marko Company sold spray paint equipment to Spain for 4,000,000pesetas (P) on October 1, with payment due in six months. Theexchange rates wereOctober 1, 20X61 peseta=$0.0048December 31, 20X61 peseta=0.0075April 1, 20X71 peseta=0.0073Required:a. Did the dollar strengthen or weaken relative to the pesetaduring the period from October 1 to December 31? Did it strengthenor weaken between January 1 and April 1 of the next year?b. Prepare all required journal entries for Marko as a result ofthe sale and settlement of the foreign transaction, assuming thatits fiscal year ends on December 31. (If no entry isrequired for a transaction/event, select "No journal entryrequired" in the first account field.)

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