THIS IS WHY I CHOOSE BARTLEBY A) Match the items in the left-hand column with the descriptions/explanations in the right-hand column.ItemsDescriptions/Explanations1. Direct exchange rate2. Indirect exchange rate3. Managing an exposednet asset position4. Spot rates5. Current rates6. Foreign currencytransaction gain7. Foreign currencytransaction loss8. Foreign currencytransactionsA. Exchange rate for immediate delivery of currencies.B. Imports and exports whose prices are stated in aforeign currency.C. The primary currency used by a company for performingits major financial and operating functions.D. U.S. companies prepare their financial statementsin U.S. dollars.E. 1 European euro equals $0.65.F. A forward contract is entered into when receivablesdenominated in European euros exceed payablesdenominated in that currency.G. Accounts that are fixed in terms of foreign currency units.H. 1 U.S. dollar equals 99 Japanese yen.I. Spot rate on the entity's balance sheet date.J. In an export or import transaction, the date thatforeign currency units are received or paid, respectively.K. A forward contract is entered into when payablesdenominated in British pounds exceed receivablesdenominated in that currency.L. Reported when receivables are denominated inEuropean euros and the euro strengthens compared tothe U.S. dollar.9. Hedging a firmcommitment10. Functional currency11. Speculating in aforeign currency12. Managing an exposednet liability position13. Settlement date14. Denominated15. Reporting currencyM. A forward contract is entered into on May 1 thathedges an import transaction to occur on July 1.N. Forward contract in which no hedging is intended.O. Reported when payables are denominated in Swiss francsand the franc strengthens compared to the U.S. dollar.B) Explain the relation between ethics and financial statement fraud by giving examples. C) On January 1, 2018, ABC Company pays $70,000 for a 10 percent interest in XYZ Company. Onthat date, XYZ has a book value of $600,000, although equipment, which has a five-year life, isundervalued by $100,000 on its books. Little Company's stock is closely held by a few investorsand is traded only infrequently. Because fair values are not readily available on a continuingbasis, the investment account is appropriately maintained at cost. On January 1, 2019, ABCacquires an additional 30 percent of XYZ Company for $264,000. This second purchase providesABC the ability to exert significant influence over XYZ and ABC will now apply the equitymethod. At the time of this transaction, XYZ's equipment with a four-year life was undervaluedby only $80,000. During these two years, XYZ reported the following operational results:Year20182019Net IncomeBirr 210,000Birr 250,000Cash Dividends Paid110,000sirr 100,000Additional InformationCash dividends are always paid on July 1 of each year.Any goodwill is considered to have an indefinite life.Requiredi.What income did ABC originally report for 2010 in connection with this investment?ii.On comparative financial statements for 2010 and 2011, what figures should ABC report inconnection with this investment?

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