Esson Oil buys oil at market prices and sells it #51

Esson Oil buys oil at market prices and sells it at market price plus a profit margin of U.S. $5 per
barrel. On January 1, Esson buys 10 barrels of oil at a price of U.S. $30 per barrel when the
Canadian dollar is on par with the U.S. dollar. On January 2, Esson sells 2 barrels for U.S. $35
each (the market price is still U.S. $30). On January 3, the price of oil increases to U.S. $32 per
barrel. On January 4, Esson sells 5 more barrels at U.S. $37. No cash was either received or
paid. The following exchange rates exist:January 1 C$1 = U.S. ...... $1.00January 2 C$1 = U.S.
...... $0.90January 3 C$1 = U.S. ...... $0.92January 4 C$1 = U.S. ...... $0.88RequiredPrepare the
journal entries to reflect these transactions assuming the functional currency is the Canadian
dollar and Esson uses a perpetual inventory system.View Solution:
Esson Oil buys oil at market prices and sells it

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