Assuming a forward contract was not entered into, what would be the net impact on Jackson Corp.'s 2023 income statement related to this transaction?
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- 1- Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied: DateSpot RateForward Rate to Jan.15December 16, 2021$0.00082 $0.00089 December 31, 2021 0.00080 0.00083 January 15, 2022 0.00086 0.00086 Assuming a forward contract was not entered into, what would be the net impact on Jackson Corp.'s 2021 income statement related to this transaction? Multiple Choice $600 (gain). $600 (loss). $400 (gain). $400 (loss). $01- Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied: DateSpot RateForward Rate to Jan.15December 16, 2021$0.00082 $0.00089 December 31, 2021 0.00080 0.00083 January 15, 2022 0.00086 0.00086 Assuming a forward contract was not entered into, what would be the net impact on Jackson Corp's 2021 income statement related to this transaction? Multiple Choice . $600 (gain). ⚫ $600 (loss). ⚫ $400 (gain). ⚫ $400 (loss). . So 2- Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied: DateSpot RateForward Rate to Jan.15December 16, 2021$0.00082 $0.00089 December 31, 2021 0.00080 0.00083 January 15, 2022 0.00086 0.00086 Assuming a forward contract was entered into on December 16 as a fair value hedge,…3. XYZ Corp., U.S.-based company, bought parts from a South Korean supplier on December 1, 2020, with 40 million Korean won to be paid on January 31, 2021. The following exchange rates applied: For V Date Spot Rate $0.0092 368, $0.0090 (2000) January 31, 2021 $0.0095 Assuming a forward contract was entered into on December 1, 2020, what would be the net impact on XYZ's 2020 income statement related to this foreign currency transaction? Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is .9901. Le A/P .0093. December 1, 2020 December 31, 2020 Forward Rate to 01/31/2021 $0.0098 $0.0093 N/A $19,802 increase in net income - $8,000 decrease in net income $8,000 increase in net income - $11,802 decrease in net income $11,802 increase in net income - $19,802 decrease in net income 00% 6 x 41 10 149 -80bb1-
- Brandt Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2020, with payment of 10 million South Korean won to be received on March 31, 2021. The following exchange rates apply: Date Spot Rate Forward Rate(to March 31, 2021) December 1, 2020 $ 0.0035 $ 0.0034 December 31, 2020 0.0033 0.0032 March 31, 2021 0.0038 N/A 1. Assuming that Brandt did not hedge his foreign exchange risk, how much foreign exchange gain or loss should it report on its 2020 income statement with regard to this transaction? a. 3000 gain b. 2000 loss c. 5000 gain d. 1000 loss 2. Assuming that Brandt entered into a forward contract to sell 10 million South Korean won on December 1, 2020, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2020 resulting from a fluctuation in the value of the won? Brandt amortizes forward points on a monthly basis using a straight-line method. Ignore…Stuff Inc., a U.S. company, imported goods for 50,000 euro on Dec. 10, Year 1 and paid for them on Jan. 10. Year 2. The following exchange rates were applicable in Years 1 and 2: Exchange Rate Date Dec. 10, Yr. 1 Dec 31, Yr 1 Jan 10, Yr. 2 What approximate gain or loss will Stuff book on Jan. 10, Year 2? OA gain of $3,000. OA loss of $3,000 O Again of $5,500 OA loss of $5,500. 0.79 € 0.82 € 0.75 €Peerless Corporation (a U.S. company) made a sale to a foreign customer on December 15, 20X1 for 125,000 crowns. It received payment on January 15, 20X2. The following exchange rates for 1 crown apply: December 15 $ 0.61 December 31 0.65 January 15 0.60 How does the fluctuation in exchange rates affect Peerless’s 20X1 income statement? $5,000 loss $5,000 gain $6,250 loss $6,250 gain
- Amazing Corporation, a U.S. enterprise, sold product to a customer in Wales on October 1, 20x1 for £200,000 with payment required on April 1, 20x2. Relevant exchange rates are: October 1, 20x1 April 1, 20x2 Spot rate December 31, 20x1 1.86 $1.87 O Liability $1,880 O Asset $1,880 O Asset $3,880 O Liability $3,880 1.90 Forward rate (to 4/1/x2) $1.85 $1.84 The discount factor corresponding to the company's incremental borrowing rate for 3 months is 0.94. Assume that Amazing Corporation enters a forward contract on October 1, 20x1 to sell £200,000 six months hence, on April 1, 20x2. How should Amazing Corporation report the forward contract on its December 31, 20x1 financial statements?1 . PL Co purchased goods on credit from a US supplier costing $US 225,000 on 5th June 2020 when the exchange rate was A$1 = US0.69 . On 30 June 2020, balance date , the exchange rate was A$1 = US0.72 . PL Co paid the US supplier on 7th July 2020 when the exchange rate was A$1 = 0.74. Required : Prepare the journal entries for the aboveOn 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.
- MNC Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2017, with payment of 10 million South Korean won to be received on March 31, 2018. The following exchange rates apply: Date Spot Rate Forward rate ( to march 31, 2018 ) December 1, 2017 $0.0035 $0.0034 December 31, 2017 0.0033 0.0032 March 31, 2018 0.0038 N/A MNC’s incremental borrowing rate is 12 percent. The present value factor for three months at an annual interest rate of 12 percent (1 percent per month) is 0.9706. Assuming that MNC entered into a forward contract to sell 10 million South Korean won on December 1, 2017, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2017 resulting from a fluctuation in the value of the won? Choose the correct.a. No impact on net income.b. $58.80 decrease in net income.c. $2,000 decrease in net income.d. $1,941.20 increase in net income.MNC Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2017, with payment of 10 million South Korean won to be received on March 31, 2018. The following exchange rates apply: Date Spot Rate Forward rate ( to march 31, 2018 ) December 1, 2017 $0.0035 $0.0034 December 31, 2017 0.0033 0.0032 March 31, 2018 0.0038 N/A MNC’s incremental borrowing rate is 12 percent. The present value factor for three months at an annual interest rate of 12 percent (1 percent per month) is 0.9706. Assuming that MNC did not enter into a forward contract, how much foreign exchange gain or loss should it report on its 2017 income statement with regard to this transaction? Choose the correct.a. $5,000 gainb. $3,000 gainc. $2,000 lossd. $1,000 loss5. U.S. Company purchases from Japanese Company for 60 million yen when theexchange rate is $.009. U.S. Company makes payment a day when the exchange rate is .0085.When recording the journal entry for payment the U.S. Company will report:a. Cash debit $540,000b. Cash credit $540,000c. Loss $30,000d. Gain $30,000 Please show work. Do not use excel
