Johnson Corporation (A U $$\text { December 15, } 2015 \quad \text { Sold 60\% of inventory acquired on 12/12/15 for 120,000 pesos on account. Invoice \quad d }$$

question 22

Essay

Johnson Corporation (a U.S.company)began operations on December 1,2015,when the owner contributed $100,000 of his own money to establish the business.Johnson then had the following import and export transactions with unaffiliated Mexican companies:
$$\text { December 15, } 2015 \quad \text { Sold 60\% of inventory acquired on 12/12/15 for 120,000 pesos on account. Invoice \quad d }$$ $$\text { Janury 1, } 2016 \quad \text { Acquired and paid the 150,00t pesos owed to the Mexican supplier. }$$ Janury 15,2016 $\quad$ Collected the 120,001 pesos from the Mexican customer and immediately converted them into U. S dollars. The following exchange rates apply:
$$\begin{array} { l l } \underline {\text { Date} } & \underline { \text {Rate } } \\\text { December 12 } & \$ .11 = 1 \text { peso } \\\text { December 15 } & \$ 12 = 1 \text { peso } \\\text { December 31 } & \$ .13 = 1 \text { peso } \\\text { January 1 } & \$ .14 = 1 \text { peso } \\\text { January 15 } & \$ .15 = 1 \text { peso }\end{array}$$ Required:
1.What were Sales in the income statement for the year ended December 31,2015?
2.What was the COGS associated with these sales?
3.What is the Accounts Payable balance in the balance sheet at December 31,2015?
4.What is the Inventory balance in the balance sheet at December 31,2015?

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