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You (US company) imported Earth Moving Equipment (EME) from Australia. You imported EME at US$ 300...

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Finance

You (US company) imported Earth Moving Equipment (EME) fromAustralia. You imported EME at US$ 300 (with Cash) on Dec 1, 2018.On Dec 15, 2018, you sold EME to Australia at A$400 (Australian $)in AR. The exchange rate on Dec 15, 2018 was 2 A$/US$. The exchangerate on Dec 31, 2018 was 4 A$/US$. On Feb 1, 2019, your customerpaid you in full. The exchange rate on Feb 1 was 1 A$/US$. Whatwere NI in 2018 and 2019, respectively? 100, 200 -100, 300 -200,200 100, 100

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JOURNAL ENTRY
Date Account Title Debit Credit Calculation
Dec1,2018 Earth Moving Equipment $300
Cash $300
Dec,15,2018 Accounts Receivable $200 400*(1/2) USD
Sales Revenue $200
Cost of goods sold $300
Earth Moving Equipment $300
Dec,31,2018 Foreign Currency Transaction Loss $100 At 4 A$=1 USAD Rate,A$400=USD400*(1/4)
Accounts Receivable $100 Loss =USD200-USD (400/4)=USD100
Feb1,2019 Cash $400 Cash Received =400*(1USD/A$)
Foreign Currency Transaction Gain $300 Gain =(400-100)USD=$300
Accounts Receivable $100
NET INCOME IN 2018
A Sales Revenue $200
B Cost of goods sold $300
C Foreign Currency Transaction Loss $100
D=A-B-C Net Income ($200)
NET INCOME IN 2019
Foreign Currency Transaction Gain $300
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