The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency. Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

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Answer 1

Question

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

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Students have asked these similar questions

On March 1, Laton Products (a U.S. firm) purchased manu-facturing inputs from a Mexican supplier for 20,000 pesos, payable on June 1. The exchange rate for pesos on March 1was $0.17. If the exchange rate increases to $0.19 on June 1,what amount of gain or loss would be reported by Latonrelated to the currency exchange?a. $400 gain.b. $200 loss.c. $400 loss.d. $200 gain.

Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2023. for 100,000 crowns. It paid the foreign currency account payable on January 15, 2024. The following exchange rates are relevant: Date November 1, 2023 December 31, 2023 January 15, 2024 a. The Required: a. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento's 2023 income statement? b. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento's 2024 income statement? b. The U.S. Dollar per Crown foreign exchange $ 0.754 0.742 0.747 in the dollar value of the crown payable is recorded as in 2023. foreign exchange in the dollar value of the crown payable is recorded as in 2024.

Question 1: (a) A merchant in the UK has agreed to sell goods to an importer in the USA at an invoice price of $130,000. Of this amount, $40,000 will be payable on shipment, $60,000 one month after shipment and $30,000 three months after shipment. The quoted foreign exchange rates ($ per £) at the date of shipment are as follows: Spot rate (on shipment) Forward rate-(one month after) Forward rate-(three months after) 1.690 -1.692 1.687 -1.690 1.680 -1.684 The merchant decides to enter forward exchange contracts through his bank to hedge these transactions for fear that the future spot rates may change to his disadvantage. i. Required: ii. State what are the presumed advantages of using forward exchange contracts. iii. Calculate the sterling amount that the merchant would receive on these contracts.

Answer 2

Question

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

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Answer 3

Question

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

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Answer 4

Question

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

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Answer 5

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

Answer 6

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

Answer 7

Chapter 11, Problem 11.12E

a.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Dollar strengthen or weaken in relation to peseta during the period between October 1 to December 31 also between the period of January 1 to April 1 of next year.

Answer 8

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

Answer 9

b.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

Journal entries for sale and settlement of foreign transaction.

Answer 10

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

Answer 11

c.

To determine

Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate. Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.

The amount of net gain or loss due to foreign currency transaction.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 11 - Prob. 11.1Q Ch. 11 - Prob. 11.2Q Ch. 11 - The U.S. dollar strengthened against the European...Ch. 11 - Prob. 11.4Q Ch. 11 - Prob. 11.5Q Ch. 11 - How are assets and liabilities denominated in a...Ch. 11 - Prob. 11.7Q Ch. 11 - Prob. 11.8Q Ch. 11 - Prob. 11.9Q Ch. 11 - Distinguish between an exposed net asset position...

Solution Summary: The author explains that the rate at which currency is changed to currency of another country is called foreign exchange rate. Foreign exchange gain or loss arises when there is selling or buying of goods and services in foreign currency.

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