Bay Limited was incorporated on 4 January 2018. The Company operates in Nairobi, Kenya. On 31 January 2019, the Company opened a branch in Toronto, Canada.
On 1 March 2019, the branch in Toronto sold goods on credit to customers for CAD 14,570. The customers are expected to pay 2 months from the date of sales. The customers actually paid for the goods on 1 May 2019.
The following exchange rates are available:
28 February 2019 CAD 1 = KSH 70
1 March 2019 CAD 1 = KSH 71
3 March 2019 CAD 1 = KSH 72
2 April 2019 CAD 1 = KSH 69
1 May 2019 CAD 1 = KSH 67
10 May 2019 CAD 1 = KSH 64
What exchange rate should be used in converting CAD 14,570 to Kenyan Shilling assuming that the customers paid the amount due was settled exactly two months after the goods were sold to them by Bay Limited?
See the suggested answer to practice activity 19.2 here.
Suggested answer to practice activity 19.2
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