how much should tyrola accrue for royalties payable at december 31 2006 606362
On November 30, 2006, Tyrola Publishing Company, located in Colorado, executed a contract with Ernest Blyton, an author from Canada, providing for payment of 10% royalties on Canadian sales of Blyton’s book. Payment is to be made in Canadian dollars each January 10 for the previous year’s sales. Canadian sales of the book for the year ended December 31, 2006, totaled $50,000 Canadian. Tyrola paid Blyton his 2006 royalties on January 10, 2006. Tyrola’s 2006 financial statements were issued on February 1, 2007. Spot rates for Canadian dollars were as follows:
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|
November 30, 2005 |
$.87 |
|
January 1, 2006 |
$.88 |
|
December 31, 2006 |
$.89 |
|
January 10, 2007 |
$.90 |
How much should Tyrola accrue for royalties payable at December 31, 2006?
- $4,350
- $4,425
- $4,450
- $4,500