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?
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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?
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- 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 $120,000Honesty Company purchased merchandise worth a total of 100,000 foreign currency on April 1, 2022 from its foreign supplier, payable within 30 days. On April 30, 2022, Honesty paid the note. The following information of spot rates is provided (see image below). Answer the following subquestion(s): a. How much is the foreign exchange gain (loss)? _________________During December of the current year, Teletex Systems, Inc., a company based in Seattle, Washington, entered into the following transactions: Dec. 10 Sold seven office computers to a company located in Colombia for 8,229,000 pesos. On this date, the spot rate was 390 pesos per U.S. dollar. 12 Purchased computer chips from a company domiciled in Taiwan. The contract was denominated in 420,000 Taiwan dollars. The direct exchange spot rate on this date was $0.0428. (a) Your answer is correct. Prepare journal entries to record the transactions above on the books of Teletex Systems, Inc. The company uses a periodic inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit…
- During December of the current year, Teletex Systems, Inc., a company based in Seattle, Washington, entered into the following transactions: Dec. 10 Sold seven office computers to a company located in Colombia for 8,229,000 pesos. On this date, the spot rate was 390 pesos per U.S. dollar. 12 Purchased computer chips from a company domiciled in Taiwan. The contract was denominated in 420,000 Taiwan dollars. The direct exchange spot rate on this date was $0.0428. (a) Prepare journal entries to record the transactions above on the books of Teletex Systems, Inc. The company uses a periodic inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit CreditDuring December of the current year, Exide company based in America, entered into the following transactions; Dec 10 Sold machinery to company located in Colombia for 6,500,000 pesos. On this date, the spot rate was 365 pesos per U.S. Dollar. Dec 12 Purchased Machine parts from a company domiciled in Japan. The contract was denominated in 600,000 Japan yen. The direct exchange spot rate on this date was $.0392. Required: Prepare journal entries to record the transactions above on the books of Exide company. The company uses a periodic inventory system. Prepare journal entries necessary to adjust the accounts as of December 31. Assume that on December 31 the direct exchange rates were as follows: Colombia peso $.00265 Japan yen .0353 Prepare journal entries to record settlement of both open accounts on January 10. Assume that the direct exchange rates on the settlement dates were as follows:…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 Record all journal entries related to the purchase and sales transactions in Diamond Corporation’s books on the following dates. Be sure to identify floating amounts with the proper foreign currency (i.e., €/euro or £/pound) for full credit. Hint - there are 6 journal entries. The journal entry dates are as follows: November 20, 20X5,…
- 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 StatementOn December 1, Year 1, Triaxal Incorporation enters into a forward contract to sell one million Philippines pesos (PP) to its bank in exchange for Canadian dollars on March 1, Year 2, at the market rate for a 90-day forward contract of PP1=$0.0227. On December 31, Year 1, Triaxal’s year-end, the 60-day forward rate to sell Philippines pesos on March 1 is quoted at PP1=$0.0222. On March 1, Year 2, the currencies are exchanged when the spot rate is PP1=$0.0220. Required Prepare journal entries for speculative forward contract under Gross Method and Net Method.ABC Corp., a US corporation, purchased goods on credit from a British company on April 8, 2007. ABC made a payment of 10,000FC on May 8, 2007. The exchange rate was $1= FC .50 on April 8 and $1= FC .60 on May 8. What amount of foreign exchange gain or loss should be recognized on May 8 ?
- On December 5, 20X8, Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 20X9. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 20X8 1 riyal = $ 0.265 December 31, 20X8 1 riyal = 0.262 January 10, 20X9 1 riyal = 0.264 Based on the preceding information, what journal entry would Imperial make on January 10, 20X9, to revalue foreign currency payable to equivalent U.S. dollar value?A. Accounts Payable (SAR) 300 Foreign Currency Transaction Gain 300 B. Accounts Payable (SAR) 100 Foreign Currency Transaction Gain 100 C. Foreign Currency Transaction Loss 100 Accounts Payable (SAR) 100D. Foreign Currency Transaction Loss 200 Accounts Payable (SAR) 200Columbia Corporation, a U.S.-based company, acquired a 100% interest in Swoboda Company in Lodz, Poland on January 1, Year 1 when the exchange rate for the Polish zloty was $0.25. Translate Swoboda’s financial statements into U.S dollars in accordance with U.S. GAAP at December 31, Year 2, using the three scenarios presented in the case and explain why the translation adjustments end up as positive or negative numbers.Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 121,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: September 15 $ 0.60 September 30 0.66 October 15 0.61 Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements. (If no entry is required for a transaction/event, select " No journal entry required" in the first account field.)