Accounting for foreign currency-denominated [receivables and payables-multiple years

The accounts of Lincoln International, a U.S. corporation, show $81,300 accounts receivable and $38,900 accounts payable at December 31, 2008, before adjusting entries are made. An analysis of the balances reveals the following:

Accounts Receivable

Receivable denominated in U.S. dollars $28,500

Receivable denominated in 20,000 Swedish krona                            11,800

Receivable denominated in 25,000 British pounds                             41,000

Total $81,300

Accounts Payable

Payable denominated in U.S. dollars                       $ 6,850

Payable denominated in 10,000 Canadian dollars 7,600

Payable denominated in 15,000 British pounds 24,450

Total $38,900

Current exchange rates for Swedish krona, British pounds, and Canadian dollars at December 3 1, 2006, are $0.66, $1.65, and $0.70, respectively.

REQUIRED with calculation:

1. Determine the net exchange gain or loss that should be reflected in Lincoln's income statement for 2008 from year-end exchange adjustments.

2. Determine the amounts at which the accounts receivable and accounts payable should be included in Lincoln's December 31, 2008, balance sheet.

3. Prepare journal entries to record collection of the receivables in 2009 when the spot rates for Swedish krona and British pounds are $0.67 and $1.63, respectively.

4. Prepare journal entries to record settlement of accounts payable in 2009 when the spot rates for Canadian dollars and British pounds are $0.71 and $1.62, respectively.