On November 15, 20x1, Lemon Co. ordered merchandise, on an FOB Shipping point term, from a foreign entity for 200,000 marks. The merchadise was shipped and invoiced to Lemon on December 10,20x1. Lemon paid the invoice on January 10, 20x2. The spot rates are as follows: Nov 15, 20x1 22.4955 December 10, 20x1 22.4875 December 31, 20x1 22.4675 January 10, 20x2 22.4475 Requirement: Provide the journal entries in 20x1 and 20x2.
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On November 15, 20x1, Lemon Co. ordered merchandise, on an FOB Shipping point term, from a foreign entity for 200,000 marks. The merchadise was shipped and invoiced to Lemon on December 10,20x1. Lemon paid the invoice on January 10, 20x2. The spot rates are as follows:
Nov 15, 20x1 22.4955
December 10, 20x1 22.4875
December 31, 20x1 22.4675
January 10, 20x2 22.4475
Requirement: Provide the
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- Review the following transactions, and prepare any necessary journal entries for Sewing Masters Inc. A. On October 3, Sewing Masters Inc. purchases 800 yards of fabric (Fabric Inventory) at $9.00 per yard from a supplier, on credit. Terms of the purchase are 1/5, n/40 from the invoice date of October 3. B. On October 8, Sewing Masters Inc. purchases 300 more yards of fabric from the same supplier at an increased price of $9.25 per yard, on credit. Terms of the purchase are 5/10, n/20 from the invoice date of October 8. C. On October 18, Sewing Masters pays cash for the amount due to the fabric supplier from the October 8 transaction. D. On October 23, Sewing Masters pays cash for the amount due to the fabric supplier from the October 3 transaction.Laminate Express extended credit to customer Amal Sunderland in the amount of $244,650 for his January 4 purchase of flooring. Terms of the sale are 2/30, n/120. The cost of the purchase to Laminate Express is $88,440. On April 5, Laminate Express determined that Amal Sunderlands account was uncollectible and wrote off the debt. On June 22, Amal Sunderland unexpectedly paid 30% of the total amount due in cash on his account. Record each Laminate Express transaction with Amal Sunderland. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Laminate Express rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, though, that in most cases the direct write-off method is not allowed.On November 15, 20x1, Lemon Co. ordered merchandise, on an FOB Shipping point term, from a foreign entity for 350,000 marks. The merchadise was shipped and invoiced to Lemon on December 10,20x1. Lemon paid the invoice on January 10, 20x2. The spot rates are as follows: Nov 15, 20x1 32.6975 December 10, 20x1 32.6895 December 31, 20x1 32.6695 January 10, 20x2 32.6495 Requirement: Provide the journal entries in 20x1 and 20x2.
- On November 15 20x1,. Lemon co. ordered merchandise, on an FOB shiping point term, from a foreign entity for 200,000 marks. The merchandise was shipped and invoiced to Lemon on December 10 20x1. Lemon paid the invoice on January 10, 20x2. The spot rates are as follows: Nov. 15, 20x1 P22.4955 December 10, 20x1 P22.4875 December 31, 20x1 P22.4675 January 10, 20x2 P22.4475 Requirement: Provide the journal entries in 20x1 and 20x2On May 11, Sharjah Co. accepts delivery of $40,000 of merchandise it purchases for resale from Dammam Corporation. With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB shipping point. The goods cost Dammam $30,000. When the goods are delivered, Sharjah pays $345 to Express Shipping for delivery charges on the merchandise. On May 12, Sharjah returns $1,400 of goods to Dammam, who receives them one day later and restores them to inventory. The returned goods had cost Dammam $800. On May 20, Sharjah mails a check to Dammam Corporation for the amount owed. Dammam receives it the following day. (Both Sharjah and Dammam use a perpetual inventory system.) Required: - Prepare journal entries that Dammam Corporation records for these transactions.On October 1, Year 7 Durian Co. of Quebec, ordered merchandise from MAGA Co. of US. The purchase price was determined to be $500,000 US. The merchandise was to be delivered on February 28th, Year 8 with payment due on delivery. On October 1, Year 7 Durian arranged a forward contract to purchase $500,000 US on February 28th, Year 8 at a rate of US 1 = $1.31. The merchandise was delivered on February 28th, Year 8, Durian purchased the US dollars from the bank and paid MAGA Co. Durian’s year-end is December 31st. Date Spot rate Forward rate October 1, Year 7 US 1 = $1.23 US 1 = $1.31 December 31, Year 7 US 1 = $1.21 US 1 = $1.33 February 28, Year 8 US 1 = $1.28 US 1 = $1.28 Required Assume the forward contract is designated as i) FV hedge ii) Cash Flow hedge iii) No hedge Prepare all JEs
- XYZ, CO., placed an order for inventory costing 9,000,000 Euro with a foreign vendor on May 15 whenthe spot rate was 1 Euro = $1.165. XYZ received the goods on June 1 when the spot rate was 1 Euro =$1.173. Also on June 1, XYZ entered into a 90-day forward contract to purchase 9,000,000 Euro at aforward rate of 1 Euro = $1.182. Payment was made to the foreign vendor on September 1 when thespot rate was 1 Euro= $1.20. XYZ has a June 30 year-end. On that date, the spot rate was 1 Euro =$1.18, and the forward rate on the contract was 1 Euro= $1.187. Changes in the current value of theforward contract is measured as the present value of the changes in the forward rates over time and noseparate accounting is given the time value of the contract. The relevant discount rate is 6%. Prepare all relevant journal entries suggested by the above facts assuming that the hedge is designatedas a fair value hedge.26. On December 27, 20x1, XYZ received a sales order for a credit sale of goods with selling price of P45,000, with credit term on 5/10, n/30. The goods were shipped by XYZ on December 31, 20x1 and were received by the buyer on January 2, 20x2. He related shipping costs amounted to P4,500. The buyer XYZ collected the receivable on January 11, 20x2. If the shipping term is FOB destination, freight collect, the amount of cash received from the collection amounts to The correct answer is: 38,250On September 1, 20x1, Creed Co. sold merchandise to a foreign enty for 250,000 francs. Terms of thesale require payment in francs on February 1, 20x2. On September 1, 20x1, the spot exchange rate wasPhp1.20 per franc. At December 31, 20x1, the spot rate was Php1.19, but the rate increased to Php1.22by February 1, 20x2, when payment was received. Requirement: Provide the journal entries in 20x1 and 20x2
- STARLA Company sold merchandise for 30,000 pounds to a customer in London on December 1, 2020. Payment inBritish pounds was due on March 31, 2021. On the same date, the company entered into a 120-day forward contract tosell 30,000 pounds to Central City Bank. Exchange rates for one pound on different dates are as follows: December 1 December 31 March 31Spot rates 81.4 82.3 82.030-day forward 82.3 82.9 83.260-day forward 82.8 82.7 82.690-day forward 81.6 82.6 83.4 120-day forward 82.5 82.8 82.5How much…An invoice received from Royal Exporters totaled $ 695.50$695.50, was dated October 33, and offered terms of 2 divided by 12 ROG.2/12 ROG. The shipment was received November 2727. If the invoice was paid on December 1313, find the net amount due. Round to the nearest cent.On March 1, Forward Import-Export Company purchased merchandise costing 70,100 Mexican pesos. Payment was due, in pesos, on June 1. The exchange rates of pesos for $1 were as follows: March 1 $1 = 10.9 pesos June 1 $1 = 11.4 pesos Round all answers to the nearest dollar. Required: 1. What is the liability in dollars on March 1? 2. What is the liability in dollars on June 1? 3. If Forward pays on June 1, is there an exchange gain or loss? If so, how much is it?