1. On November 1, 2020, an entity acquired on account goods from a foreign supplier at a cost of $3,000. The accounts payable are paid on January 30, 2021. On December 1, 2020, an entity sold on account goods to a foreign customer at a selling price of $2,500. The accounts receivable is collected on February 28, 2021. The entity is operating in Philippine economy wherein the functional currency is the Philippine Peso. The following exchange rates are provided Buying spot rate Selling spot rate November 1, 2020 P40 P42 December 1, 2020 39 40 December 31, 45 45.5 2020 January 30, 2021 45.5 46 February 28, 2021 46 46.5 What is the carrying amount of monetary asset on December 31, 2020?
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- Ball Corp had the following foreign currency transactions during 2019: a) Merchandise was purchased from a foreign supplier on January 20, 2019, for the Philippine peso equivalent of P90,000. The invoice was paid on March 20, 2019, at the Philippine peso equivalent of P96,000. b) On July 1, 2019, Ball borrowed the Philippine peso equivalent of P500,000 evidenced by a note that was payable in the lender's local currency on July 1, 2020. On December 31, 2019, the Philippine peso equivalents of the principal amount and accrued interest were P520,000 and P26,000, respectively. Interest on the note is 10% per annum. In Ball's 2019 income statement, what amount should be included as a foreign exchange trasaction loss? a. P6,000 b. P21,000 c. P0 d. P27,000Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency: Sales K 210,000 Inventory (bought on 3/1/20) 105,000 Equipment (bought on 1/1/19) 62,000 Rent expense 14,000 Dividends (declared on 10/1/20) 22,000 Notes receivable (to be collected in 2023) 37,000 Accumulated depreciation—equipment 18,600 Salary payable 5,200 Depreciation expense 6,200 The following U.S.$ per kuna exchange rates are applicable: January 1, 2019 $0.20 Average for 2019 0.21 January 1, 2020 0.25 March 1, 2020 0.26 October 1, 2020 0.28 December 31, 2020 0.29 Average for 2020 0.27 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in…Winston Corp., a U.S. company, had the following foreign currency transactions during 2021: ( 1.) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the U.S. dollar equivalent of $54,000. (2.) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022. What amount should be included as a foreign exchange gain or loss from the two transactions for 2022?
- XYZ Corp, has carried out transactions denominated in foreign currency during the financial year ended 31 October 2019 and has conducted foreign operations through a foreign entity. Its functional and presentation currency is the US dollar. XYZ purchased inventory from a foreign supplier for Euros 8 million on 31 July 2019, the trade payable was still outstanding and the inventory were still held by XYZ Corp. XYZ Corp sold its products to a foreign customer for Euros 4 million on 31 July 2019 and received payment for the products in euros on 31 October 2019. Additionally, XYZ Corp purchase investment property on 1 November 2018 for Euros 28 million. At 31 October 2019, the investment property had a fair value of Euros 24 million. The company uses the fair value model in accounting for its investment properties. XYZ would like advice on how to treat this transactions in the financial statement for the year ended 31 October 2019. Exchange rates Date Euro:$ Average Rate for Year to…The following are the revenue items in the Income Statement of a domestic corporation for the year 2021:Interest income from bank deposit, Philippines, P40,000Yield from deposit substitute, Philippines, P80,000Interest income received from a depositary bank under EFCDS, Philippines, P60,000Interest income from bank deposit, USA, P400,000Interest on trade notes receivable, Philippines, P30,000Advance rent for 2 years, Philippines, P600,000Royalties, Philippines, P100,000Royalties, USA, P300,000Dividend received from domestic corporation, P150,000Dividend received from a foreign corporation, P350,000Prizes and winnings, Philippines, P400,000Refund of Philippine value-added tax, P100,000How much is the total final withholding taxes on passive income?HH Inc. had the following transactions:• On May 1, HH purchased parts from a foreign company (FC1) for a Philippine pesoequivalent value of P8,400 to be paid on June 20. The exchange rates were:• On July 1, HH sold products to a foreign customer for a Philippine peso equivalent ofP10,000 to be received on August 10. Foreign company’s local currency units is the FC2. The exchange rates were:May 1 1 FC1 = P0.0070June 20 1 FC1 = P0.0075July 1 1 FC2 = P0.20August 10 1 FC2 = P0.22REQUIRED:1. Assume that the two transactions are denominated in pesos. Prepare the entriesrequired for the dates of the transactions and their settlement in pesos.2. Assume that the two transactions are D nominated in the applicable local currencyunits of the foreign entities. Prepare the interest required for the dates of thetransactions and their settlement in the local currency units of the foreign company(FC1) and foreign customer (FC2).
- On 15 May 2020 Penn Ltd, an Australian company with functional currency of Australian dollars acquires goods on credit from a supplier in Cardiff. The goods are shipped FOB Cardiff on 15 May 2020. The cost of the goods is UK200,000 and the debt remains unpaid at 30 June 2020. On 15 May 2020 the exchange rate is A$1.00 = UK0.56. On 30 June 2020 it is A$1.00 = UK0.53. Penn Ltd's reporting date is 30 June. Provide the accounting entries necessary to account for the above purchase transaction for the year ending 30 June 2020.Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local currency. On December 31, 2017, Brief correctly included this receivable for 200,000 local currency units (LCU) in its balance sheet at $110,000. When Brief collected the receivable on February 15, 2018, the U.S. dollar equivalent was $120,000. In Brief’s 2018 consolidated income statement, how much should it report as a foreign exchange gain?a. $–0–b. $10,000c. $15,000d. $25,0001. An entity acquired all the share capital of a foreign entity at a consideration of 9 million baht on June 30, 2020. The fair value of the net assets of the foreign entity at that date was 6 million baht. The functional currency of the entity is the peso. The financial year-end of the entity is December 31, 2020. The exchange rates at June 30, 2020, and December 31, 2020, were 1.5 baht = P1 and 2 baht = P1 respectively.What figures for goodwill should be included in the financial statements for the year ended December 31, 2020?a. 2,000,000b. 1,500,000c. 3,000,000d. 3,500,000 2. Morny Corporation sold equipment to its 80% owned subsidiary, Morrie Corporaiton on January 1, 2020. Morny sold the equipment for P110,000 when its book value was P85,000 and it had a 5-year remaining useful life with no expected salvage value. Separate balance sheets for Morny and Morrie included the following equipment and accumulated depreciation amounts on December 31, 2020:Morny MorrieEquipment P750,000…
- On May 8, 2019, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The terms of the sale required Lopez to pay 800,000 pesos on February 10, 2020. Jett prepares quarterly financial statements on March 31, June 30, September 30, and December 31. The exchange rates for pesos during the time the receivable is outstanding follow. Compute the foreign exchange gain or loss that Jett should report on each of its quarterly income statements for the last three quarters of 2019 and the first quarter of 2020. Also compute the amount reported on Jett’s balance sheets at the end of each of its last three quarters of 2019. May 8, 2019 . $0.1323 June 30, 2019 . 0.1352 September 30, 2019 . 0.1368 December 31, 2019 0.1335 February 10, 2020 . 0.1386On March 1, 2021, a Philippine company sold merchandise to a foreign customer in Singapore dollars for SG$12,000. On the same date, the Philippine company received a 60-day 12% note receivable from the foreign customer. On April 30, 2021, the Philippine company collected the total proceeds from the foreign customer.Buying Rate:March 1, 2021 - P1 = SG$.O29411March 31, 2021 - P1 = SG$.028901April 30, 2021 - P1 = SG$.028571Selling Rate:March 1, 2021 - SG$1 = P35.47March 31, 2021 - SG$1 = P36.10April 30, 2010 - SG$1 = P36.071. What is the forex gain or loss on March 31, 2021? a. 7,200 gainb. 7,200 lossc.7.272 gaind 7.272 loss2. What is the forex gain or loss on the settlement date? a. 4,800 gainb. 4,800 lossc. 4,848 gaind. 4,848 loss(a) ABC Co has a year end of 31 December 20X1 and uses the dollar ($) as its functional currency. On 25 October 20X1 ABC Co buys goods from a Swedish supplier for Swedish Krona (SWK) 286,000. Rates of exchange: 25 October 20X1 $1 = SWK 11.16 16 November 20X1 $1 = SWK 10.87 31 December 20X1 $1 = SWK 11.02 Required: Show the accounting treatment for the above transactions if: (a) A payment of SWK286,000 is made on 16 November 20X1. (b) The amount owed remains outstanding at the year-end date.