Question

On November 30, 2020, a U.S. company purchased merchandise on credit from a Swiss supplier at an invoice price of CHF 1,000, when the exchange rate was $1.05/CHF. On December 31, 2020, the company's year-end, the exchange rate was $1.045/CHF. On February 1, 2021, the company purchased the CHF 1,000 for $1.048/CHF and paid the invoice. On March 15, 2021, when the exchange rate was $1.044, the company sold the merchandise to a U.S. customer for $2,000. At what amount should the merchandise be reported on the U.S. company's December 31, 2020 balance sheet? a. $1,044 b. $1,050 c. $1,048 d. $1,045

          On November 30, 2020, a U.S. company purchased merchandise on credit from a Swiss supplier at an invoice price of CHF 1,000, when the exchange rate was $1.05/CHF. On December 31, 2020, the company's year-end, the exchange rate was $1.045/CHF. On February 1, 2021, the company purchased the CHF 1,000 for $1.048/CHF and paid the invoice. On March 15, 2021, when the exchange rate was $1.044, the company sold the merchandise to a U.S. customer for $2,000.

At what amount should the merchandise be reported on the U.S. company's December 31, 2020 balance sheet?
a. $1,044
b. $1,050
c. $1,048
d. $1,045

Added by Victoria A.

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