Spot Price for November Delivery Date May 1, 2020 June 30, 2020 September 30, 2020 RM50 per kilogram RM52 per kilogram RM53 per kilogram REQUIRED: (Ignore time value of money) Present the journal entries for the following dates/transactions. a. May 1, 2020–1nception of futures contract, no premium paid. b. June 30, 2020–Setia Maju Bhd prepares financial statements. c. September 30, 2020–Setia Maju Bhd prepares financial statements. d. October 5, 2020–Setia Maju Bhd. purchases 20,000 kilograms of titanium at RM53 per kilogram and settles the futures contract. e. December 15, 2020–Setia Maju Bhd sells clubs containing titanium purchased in October 5, 2020 for RM250,000. The cost of the finished goods inventory is RM140,000. f. Indicate the amount(s) reported in the income statement related to the futures contract and the inventory transactions on December 31, 2020.

Spot Price for November Delivery Date May 1, 2020 June 30, 2020 September 30, 2020 RM50 per kilogram RM52 per kilogram RM53 per kilogram REQUIRED: (Ignore time value of money) Present the journal entries for the following dates/transactions. a. May 1, 2020–1nception of futures contract, no premium paid. b. June 30, 2020–Setia Maju Bhd prepares financial statements. c. September 30, 2020–Setia Maju Bhd prepares financial statements. d. October 5, 2020–Setia Maju Bhd. purchases 20,000 kilograms of titanium at RM53 per kilogram and settles the futures contract. e. December 15, 2020–Setia Maju Bhd sells clubs containing titanium purchased in October 5, 2020 for RM250,000. The cost of the finished goods inventory is RM140,000. f. Indicate the amount(s) reported in the income statement related to the futures contract and the inventory transactions on December 31, 2020.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter5: Currency Derivatives

Section: Chapter Questions

Problem 38QA

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