a. How much is the ForEx gain or (loss) on December 31, 2017? b. How much is the outstanding accounts payable as of December 31,2017? c. How much is the ForEx gain or (Loss) on February 1, 2018? d. How much is the Net ForEx gain or (loss)?
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a. How much is the ForEx gain or (loss) on December 31, 2017?
b. How much is the outstanding accounts payable as of December 31,2017?
c. How much is the ForEx gain or (Loss) on February 1, 2018?
d. How much is the Net ForEx gain or (loss)?
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- On September 1, 2016, Bain Corp. recorded a sale of inventory to a foreign customer for 300,000 LCU’s when the US dollar equivalent was $96,000. Bain did not enter into a forward contract. Bain shipped the inventory on October 15, 2016 when the US dollar equivalent was $100,000. Bain received the customer’s remittance in full on November 16, 2016, and sold the 300,000 LCU for $105,000. In its income statement for the year ended December 31, 2016, Bain should report as part of net income a foreign exchange transaction gain of: Select one: a. $0 b. $4,000 c. $5,000 d. $9,000Carl Inc. purchased inventory on September 12, 2017 from a foreign customer for 750,000 units of foreign currency (FC) due on January 12, 2018. Simultaneously, the company entered into a forward contract for 750,000 units of FC for delivery on January 12, 2018 at the forward rate of $1.03. Payment was made to the foreign customer on January 12, 2018. The company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Date Spot Rate (Delivery on 1/12/2018) 9/12/2017 1.01 1.03 12/31/2017 1.08 1.09 1/12/2018 1.05 Notes: Read carefully and follow strictly so that Bb can grade you correctly!1. Use comma in numbers, one thousand is 1,000, not 1000. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign.2. If no entry is required, write N/A.3. Only use the following accounts: Inventory, A/P (FC), A/R (FC), Cash, Sales, CGS, Exchange G/L, Fwd Contract,…A company located in the USA, which has the dollar as its functional currency, purchased inventory on February 1 in Vietnam for 10,000,000 dongs with a payment date of April 1. One dong can be exchanged for $0.01 on February 1, and one dong can be exchanged for $0.12 on April 1. On April 1, the company pays off the 10,000,000-dong debt from the purchase of inventory. When the US company presents its financial statements, which of the following statements is false? The business should file with the statement a gross profit of $110,000. No profit is recognized related to inventory A loss of $20,000 is reported as a result of accounts payable Cost of goods sold is reported at $120,000
- Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016, Constellation purchased €10,500 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for €10,500 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier €10,500 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $14,250 in cash. Relevant exchange rates ($/€) are as follows: Spot rate Forward rate for deliveryJune 30, 2016 April 1, 2016 $ 1.32 $1.30 June 30, 2016 1.36 -- Prepare the journal entries made by Constellation Brands on June 30 and July 12 concerning the above events. Assume Constellation Brands is a calendar-year company, and records cost of goods sold at the time of sale. General Journal Date Description Debit Credit…On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign supplier for 50,000 schillings. Lisbeth agrees to pay in 45 days after it sells the merchandise. Lisbeth makes sales rather quickly and pays the entire obligation on January 25, 2018. Currency exchange rates for 1 schilling are as follows:Prepare all journal entries for Lisbeth Company in connection with this purchase and payment.Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016, Constellation purchased €31,500 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for €31,500 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier €31,500 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $42,750 in cash. Relevant exchange rates ($/€) are as follows: PLEASE USE THE GENERAL JOURNAL PROVIDED FOR NECESSARY ENTRIES Spot rate Forward rate for deliveryJune 30, 2016 April 1, 2016 $ 1.34 $1.32 June 30, 2016 1.38 -- Prepare the journal entries made by Constellation Brands on June 30 and July 12 concerning the above events. Assume Constellation Brands is a calendar-year company and records cost of goods sold at the time of sale.…
- Esposito is an Italian subsidiary of a U.S. company. Esposito’s ending inventory is valued at the average cost for the last quarter of the year. The following account balances are available for Esposito for 2021: Beginning inventory € 20,000 Purchases € 400,000 Ending inventory € 15,000 Relevant exchange rates follow: 4th quarter average, 2020 $ 0.93 = € 1 December 31, 2020 0.94 = € 1 Average for 2021 0.96 = € 1 4th quarter average, 2021 0.99 = € 1 December 31, 2021 1.01 = € 1 Compute the cost of goods sold for 2021 in U.S. dollars using the temporal method.Kangaroo Ltd is an Australian company for which the Australian dollar is the functional and presentation currency. The company has entered several foreign activities, and these include the following: Kangaroo Ltd has sold some inventory to a company in Hong Kong for HK$50,000. The order was placed by the Hong Kong company on 12 May 2016, with delivery made on 20 June 2016. Under the conditions of the contract, title to the goods passes to the Hong Kong company on delivery (i.e., term of the sale was FOB delivery or destination). Kangaroo Ltd receives payment for the goods on 20 July 2016. The following exchange rates are applicable: 12 May 2016: A$1.00 = HK$5.70 20 June 2016: A$1.00 = HK$6.20 30 June 2016: A$1.00 = HK$6.50 20 July 2016: A$1.00 = HK$6.40 Required: Prepare necessary journal entries in books of Kangaroo Ltd following the requirements of AASB121, The Effects of Changes in Foreign Exchange…On September 22, Year 2, Yumi Corp. purchased merchandise from an unaffiliated foreign company for 10,000 units of the foreign company’s local currency. On that date, the spot rate was $.55. Yumi paid the bill in full on March 20, Year 3, when the spot rate was $.65. The spot rate was $.70 on December 31, Year 2. What amount should Yumi report as a foreign currency transaction loss in its income statement for the year ended December 31, Year 2?
- On April 4 2017 Chase company products delivered to a Pakistan firm inventory it sold for 100,000 rupees. Payment is due to be received on August 2, 2020. The company's fiscal year ends June 30. Also on April 4, Conrado Uberita Beauty Products entered into a foreign exchange forward contract to sell 100,000 rupees on August 2, 2020. April 4, 2020June 30, 2020August 2, 2020Spot Rate (rupees)P 0.80P 0.84P 0.82Forward Rate (rupees)0.770.830.82 1. What was the net impact on Chase income in 2017 as a result of this hedge?2. The fair value of the forward contract on June 30 2017?Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows:Cost of goods sold . . .. LCU 5,000,000Beginning inventory . . . . . . . 500,000Ending inventory . . . . . . . . . . 600,000November 1, 2017 . . . . $0.16 = 1 pesoDecember 31, 2017 . ...... . . 0.17 = 1January 17, 2018 . . . . . . . . . 0.18 = 1January 31, 2018 . . . . . . . . 0.19 = 1 What amount does Newberry’s consolidated balance sheet report for this inventory at December 31, 2017? Choose the correct.a. $16,000.b. $17,000.c. $18,000.d. $19,000.Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows:Cost of goods sold . . .. LCU 5,000,000Beginning inventory . . . . . . . 500,000Ending inventory . . . . . . . . . . 600,000November 1, 2017 . . . . $0.16 = 1 pesoDecember 31, 2017 . ...... . . 0.17 = 1January 17, 2018 . . . . . . . . . 0.18 = 1January 31, 2018 . . . . . . . . 0.19 = 1What amount does Newberry’s consolidated income statement report for cost of goods sold for the year ending December 31, 2018?a. $16,000.b. $17,000.c. $18,000.d. $19,000.