Importing Transactions-Journal Entries
Striking Furs Imports Furs from Canada

question 47

Essay

Importing transactions-journal entries
Striking Furs imports furs from Canada. In the space provided below, prepare journal entries to record the following events.
Dec. 11, 2009: 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 .85 U.S. dollars per Canadian dollar. (Striking uses the perpetual inventory method; debit the Inventory account.)
Dec. 31, 2009: Striking made a year-end adjusting entry relating to the account payable to Capable Trappers. The exchange rate at year-end is .89 U.S. dollars per Canadian dollar.
Feb. 9, 2010: 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 .87 U.S. dollars per Canadian dollar. $$\begin{array} { | l | l | l | l | } \hline 2009 & \text { General Journal } & & \\\hline \text { Dec 11 } & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline \text { Dec 31 } & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline 2010 & & & \\\hline \text { Feb 9 } & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

---

Definitions:

Long-Run Equilibrium

Refers to a state in an economy where all factors of production are efficiently utilized, and supply equals demand, leading to stable prices and full employment over time.

Money Supply

The aggregate financial resources present in an economy at a given time, which include currency, coinage, and the deposits in both current and savings accounts.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary depending on income level, type of good, or service.

Government Spending

Government Spending encompasses all expenditure by government bodies and agencies, including investments, public services, and defense spending.