Apex Ltd, is a computer software manufacturing company based in the United States of America (USA). On 1st January 2019, it sold goods worth Kn10,000.00 to Electro Computers, a company based in Zambia. Electro computers Ltd paid for the software in June 2019. The prevailing exchange rates were: January 2019: Kn12:00 : US $ 1.00 June 2019: Kn 12:30 : US $ 1.00 Required: Show how the necessary accounting entries for the transaction will be reflected in the books of each company.
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Apex Ltd, is a computer software manufacturing company based in the United States of America (USA). On 1st January 2019, it sold goods worth Kn10,000.00 to Electro Computers, a company based in Zambia. Electro computers Ltd paid for the software in June 2019. The prevailing exchange rates were:
January 2019: Kn12:00 : US $ 1.00
June 2019: Kn 12:30 : US $ 1.00
Required:
Show how the necessary accounting entries for the transaction will be reflected in the books of each company.
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- Apex Ltd, is a computer software manufacturing company based in the United States of America (USA). On 1st January 2019, it sold goods worth K10,000.00 to Electro Computers, a company based in Zambia. Electro computers Ltd paid for the software in June 2019. The prevailing exchange rates were:January 2019: K12:00 : US $ 1.00June 2019: K12:30 : US $ 1.00Required:Show how the necessary accounting entries for the transaction will be reflected in the books of each company.Local Corp imported a heavy machine from the US for US$50,000 on October 10, 2019. A letter of credit was opened with a Makati branch based on the commercial invoice for US$50,000, on which Local Corpl made a 100% deposit cover based on the exchange rate of $1.00 to P27.50. Shipment of the heavy machine was effected on December 30, 2019, at which time the exporter collected the proceeds of the letter of credit when the prevailing exchange rate was $1.00 to P28.00. From the exchange rate fluctuation, Local Corp realized: Group of answer choices A. P25,000 gain B.P25,000 loss C. P5,000 gain D. No gain, No lossLeigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2019, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 17,000 pounds. The exchange rate on that day for £1 was $1.4583. On December 31, 2019, when Leigh prepared its financial statements, the rate was £1 for $1.4382. Bronson paid its bill in full on January 15, 2020, at which time the exchange rate was £1 for $1.4482. Leigh immediately exchanged the 17,000 pounds for U.S. dollars. Prepare Leigh’s journal entries on December 16, December 31, and January 15 (round to the nearest dollar).
- Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2019 and 2020. 2019 Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.1043 on this day. July 21 Sold merchandise on credit to Sumito Corp. in Japan. The price of 1.5 million yen is to be paid 120 days from the date of sale. The exchange rate for yen is $0.0094 on this day. Oct. 14 Sold merchandise for 19,000 pounds to Smithers Ltd. of Great Britain, payment in full to be received in 90 days. The exchange rate for pounds is $1.4566 on this day. Nov. 18 Received Sumito’s payment in yen for its July 21 purchase and immediately exchanged the yen for dollars. The exchange rate for yen is $0.0092 on this day. Dec. 20 Sold merchandise for 17,000 ringgits to Hamid Albar of Malaysia, payment in full to be received in 30 days. On this day, the exchange rate for ringgits is $0.4501. Dec. 31 Recorded adjusting entries…On September 30, 2020, Chicken Ltd., a Canadian company, entered into a contract to purchase goodsfrom Wing Ltd., a foreign corporation. The terms of the contract call for the goods to be delivered toChicken Ltd.'s Edmonton location on May 30, 2021. The cost of goods is EUR $1,000,000 to be settled onJuly 31, 2021. On September 30, 2020, Chicken Ltd. also arranged for a forward contract through its bank for EUR$1,000,000. The goods were delivered on time, and Chicken Ltd, settled with Wing Ltd. on July 31, 2021.Chicken Ltd. has a April 30 year-end.The spot and forward rates are as follows: Spot Rate ($CAD)1 USD = x.xX CAD Forward Rate($CAD)1 USD = XXX CAD September 30, 2020 $1.42 $1.46 April 30, 2021 $1.44 $1.48 May 30, 2021 $1.45 $1.49 July 31, 2021 $1.50 $1.50 RequiredPrepare Chicken Ltd.'s journal entries to reflect the above assuming that:a. the hedge is a cash flow hedge, andb. the hedge is a fair value hedge.On 1st June 2021, Nutella Ltd, an Australian company with a functional currency of A$, entered business purchasing inventory from their suppliers in Samoa Tala $ when the exchange rate was A$1.00 = Samoan Tala $2.10. On 30thJune 2021 the exchange rate is A$1.00 = Samoan Tala $2.30. The transaction was settled on 10th July 2021 when the exchange rate was A$1.00 = Samoan Tala $2.20 Required Translate the following for initial and Subsequent measurements and calculate the realised gain or loss on translation. 1. Inventories and accounts payable of Samoa Tala $ 100 000
- On 1 November 2022, Long Ltd enters a contract to buy inventory from an overseas supplier, with the inventory to be delivered in six months' time. A sum of US$1 000000 is payable on delivery of the inventory. Long Ltd does not want to be exposed to potential losses associated with changes in the exchange rate. As a result, Long Ltd takes out a forward rate contract with Board Bank to purchase US$1 000000 in six months' time at an exchange rate of A$1.00 = US$0.70. REQUIRED Explain who now bears the risks associated with changes in the exchange rate, and calculate how much Long Ltd will ultimately pay for the inventoSpindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 320 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 512,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date U.S. Dollar perBrazilian Real (BRL) September 1, 2020 $ 0.220 December 1, 2020 0.210 December 31, 2020 0.230 March 1, 2021 0.215 Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? Assume that Spindler acquired the surfboards on…Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 420 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 672,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date U.S. Dollar perBrazilian Real (BRL) September 1, 2020 $ 0.230 December 1, 2020 0.220 December 31, 2020 0.240 March 1, 2021 0.225 Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? Assume that Spindler acquired the surfboards on…
- AL Maha, an Omani Company which close its accounts on 31/12 every year, sold goods to Korean Company on 1/09/2020 amounting to 5000000 KRW on a six- month term. The exchange rates as follows: 1/09/2020 1 OMR= 2937 KRW 31/12/2020 1 OMR= 3100 KRW 1/03/2021 1 OMR= 2966 KRW Required: What is the value of cash in OMR that will receive at 1/3/2021? (ROUND) Select one: a. 1686 b. 1613 c. 1702 d. Correct answer not availableSpindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 300 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 480,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date U.S. Dollar perBrazilian Real (BRL) September 1, 2020 $ 0.240 December 1, 2020 0.230 December 31, 2020 0.250 March 1, 2021 0.235 Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? Assume that Spindler acquired the surfboards on…Wolters Corporation is a U.S. corporation that purchased 50,000 chocolate bars from a foreign manufacturer on March 1, 2024 for 80,000 foreign currency units, to be paid on April 30, 2024. On March 1, 2024 Wolters also entered into a forward contract to purchase 80,000 foreign currency units on April 30, 2024. Wolters has a March 31 year end. Exchange rates are as follows: Date Spot Rate Forward Rate 3/1/24 $0.69 $0.65 3/31/24 $0.61 $0.63 4/30/24 $0.66 $0.66 Required: Prepare the journal entries to record the transactions through April 30, 2024. March 31 is the fiscal period end. Ignore the split between spot gain/loss and time value.