I.A. Prepare all entries on the Phil. firm’s books to record the above transactionsB. Determine the following: Foreign exchange gain or loss on:i. December 1, 20x4ii. December 31, 20x4iii. March 1, 20x5On December 31, 20x4:i. Accounts payableii. Inventory Part 2REQUIRED: Translate (translation working paper) the financial statements of GoldCorporation into the presentation currency which is Philippine peso. Gold Corporation began its operation at the beginning of 2018. Its functional currency isthe US dollar and its presentation currency is the Philippine peso. Gold Corporation hadcash of $225,000 and common stock of $225,000 on January 1, 2018. At the beginningof February, Gold Corporation purchased land for $80,000 and building for $55,000 inexchange for a three-year note payable. Revenue for 2018 was $355,000. Operatingexpenses, including depreciation of $5,000, were $250,000. The statement of financialposition for Gold Corporation in US dollar at the end of 2018 is as follows:Gold CompanyBalance SheetDecember 31, 2018AssetsUSDollarsCash105,000170,000100,00050,000425.000Accounts receivableLandBuilding, netTotal assetsLiabilities and Shareholders' EquityAccounts payableLong-term debtShare capitalRetained earningsTotal liabilities and stockholders' equity10,000155,000225,00035.000425.000Additional land was purchased in March in exchange for a three-year note payable for$20,000. Dividends of $70,000 were declared and paid on October. The exchange ratesfor 2018 are as follows:Beginning of the yearP46.50FebruaryMarch46.2546.7545.75OctoberEnd of the yearWeighted average45.5046.00REQUIRED: Translate (translation working paper) the financial statements of GoldCorporation into the presentation currency which is Philippine peso. On November 1, 20x4 a Philippine firm ordered 1,200 units of inventory from a US firmfor $24,000. The inventory was shipped and invoiced to the Phil. firm on December 1,20x4, to be paid on March 1, 20x5. The firm's fiscal year-end is December 31. Assumefurther that the Phil. firm did not engage in any form of hedging activity. The spot ratesfor US dollars at various dates are as follows:Buying ratesSelling ratesP40.25Nov. 1, 20x4Dec. 1, 20x4Dec. 31, 20x4March 1, 20x5P39.8040.0040.7040.5540.8040.6040.65Required:1. Prepare all entries on the Phil. firm's books to record the above transactions2. Determine the following:a. Foreign exchange gain or loss on:i.December 1, 20x4ii.December 31, 20x4iii.March 1, 20x5b. On December 31, 20x4:i.Accounts payableii.Inventory

Journal entry refers to the reporting of the business transaction into the books of accounts of…

A. Prepare all entries on the Phil. firm’s books to record the above transactions B. Determine the following: Foreign exchange gain or loss on: i. December 1, 20x4 ii. December 31, 20x4 iii. March 1, 20x5 On December 31, 20x4: i. Accounts payable ii. Inventory

A. Prepare all entries on the Phil. firm’s books to record the above transactions B. Determine the following: Foreign exchange gain or loss on: i. December 1, 20x4 ii. December 31, 20x4 iii. March 1, 20x5 On December 31, 20x4: i. Accounts payable ii. Inventory

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter9: Taxation Of International Transactions

Section: Chapter Questions

Problem 27P

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On November 20, 20X5, Diamond Corporation, a calendar-year US corporation, had merchandise delivered from a vendor in France. The invoice was for 350,000 euro and was due January 20, 20X6. On December 13, 20X5, Diamond’s British division sold the merchandise and issued the customer an invoice for 400,000 pounds due February 13, 20X6. Both invoices were paid on their due date. Exchange rates were as follows: Date Euro British Pound November 20, 20X5 $1.1698 $1.6356 December 13, 20X5 1.1713 1.6317 December 31, 20X5 1.1684 1.6286 January 20, 20X6 1.1665 1.6334 February 13, 20X6 1.1652 1.6293 Determine the net exchange gain/(loss) from the above purchase and sale transactions to be included in Diamond’s Income Statement for 20X5 and 20X6. Identify whether it is a gain or loss. 20X5 Income Statement 20X6 Income Statement
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