A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include: Import or export of goods and services, the prices of which are stated in foreign currency. Loan receivable or payable in foreign currency. Purchase or sale of foreign currency, in units or in forward contracts. The entries required assuming transactions are denominated in U.S. dollars.

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Answer 1

Question

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

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1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar-equivalent value of $8,400 to be paid on June 20. The exchange rates were May 1 June 20 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,000, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were July 1 August 10 Required: a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. b. Assume that the two transactions are denominated in the applicable LCUs of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the LCUs of the Japanese company (yen) and the Brazilian customer (real). Answer is not complete. Complete this question by entering your answers in the tabs below. No Required A Required B Assume that the two transactions are denominated in the…

Harris Incorporated had the following transactions: On May 1, Harris purchased parts from a Japanese company for a U.S. dollar–equivalent value of $7,000 to be paid on June 20. The exchange rates were May 1 1 yen = $0.0070 June 20 1 yen = 0.0075 On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,400, to be received on August 10. Brazil’s local currency unit is the real. The exchange rates were July 1 1 real = $0.20 August 10 1 real = 0.22 Required: Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. Assume that the two transactions are denominated in the applicable LCUs of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the LCUs of the Japanese company (yen) and the Brazilian customer (real).

HH Inc. had the following transactions:• On May 1, HH purchased parts from a foreign company (FC1) for a Philippine pesoequivalent value of P8,400 to be paid on June 20. The exchange rates were:• On July 1, HH sold products to a foreign customer for a Philippine peso equivalent ofP10,000 to be received on August 10. Foreign company’s local currency units is the FC2. The exchange rates were:May 1 1 FC1 = P0.0070June 20 1 FC1 = P0.0075July 1 1 FC2 = P0.20August 10 1 FC2 = P0.22REQUIRED:1. Assume that the two transactions are denominated in pesos. Prepare the entriesrequired for the dates of the transactions and their settlement in pesos.2. Assume that the two transactions are D nominated in the applicable local currencyunits of the foreign entities. Prepare the interest required for the dates of thetransactions and their settlement in the local currency units of the foreign company(FC1) and foreign customer (FC2).

Answer 2

Question

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

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Answer 3

Question

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

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Answer 4

Question

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

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Answer 5

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

Answer 6

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

Answer 7

Chapter 11, Problem 11.6E

a

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in U.S. dollars.

Answer 8

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

Answer 9

b

To determine

Introduction: A foreign currency transaction is an economic activity denominated in a currency other than the recording currency of the business. These transactions may include:

Import or export of goods and services, the prices of which are stated in foreign currency.

Loan receivable or payable in foreign currency.

Purchase or sale of foreign currency, in units or in forward contracts.

The entries required assuming transactions are denominated in LCUs.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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Solution Summary: The author explains that foreign currency transactions are economic activities denominated in a currency other than the recording currency of the business.

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