On March 1, 2019, a U.S. company made a credit sale requiring payment in 30 days from a Malaysian company, Hamac Sdn. Bhd., of 20,000 Malaysian ringgits. Assuming the exchange rate between Malaysian ringgits and U.S. dollars is $0.4538 on March 1 and $0.4899 on March 31, prepare the entries to record the sale on March 1 and the cash receipt on March 31.
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: Inventory in pesos=Inventory bought×100-% sold=112,000×100-80%=22,400
Q: Honk, Inc., a U.S. corporation, purchases weight-lifting equipment for resale from HiDisu, a…
A: Foreign currency transactions are the transactions that are made by corporations situated in…
Q: On December 23, 2019, the liaison officer of Alam Co was given an P18,000 travel advance for a…
A: On december 31, 2019: Exchange rate was HK$1=P.48 On december 23,2019 , travel advance of P18000…
Q: The White Dove company, whose year ends 31 December, buys some goods from Ranka of France on 30…
A: The question is based on the concept of Financial Accounting.
Q: Bright Corporation is a U.S. Company made sale for British customer on 1, October 2020 for £100,000.…
A: Journal entries for Bright Corporation in connection of this sale, assuming that the end of…
Q: On September 1, 2020, Creed Co. sold merchandise to a foreign entity for 250,000 francs. Terms of…
A: The recording of transactions in the form of currencies outside the functional currency is known as…
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: Solution: - Notes: - the following notes need to understand before start of calculations as follows…
Q: On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year,…
A: Interest Expense = Principal Amount of Notes Payable x Interest Rate
Q: On May 8, 2019, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The…
A:
Q: ara Corporation issued a promissory note denominated in foreign currency for the purchase made from…
A: Solution Concept in respect of the monetary assets and liabilities , there shall be initial and…
Q: April 10, 2019, when the spot rate is $1.10/€, a U.S. company sells merchandise to a customer in…
A: Ans. In this question the U. S. company sold the merchandise at $1.10 per euro. The payment is…
Q: Use the following information for the next two questions: On December 1, 20x1, Entity A sells good…
A: Foreign exchange gain or loss is the gain or loss that occurs to the entity due to changes in the…
Q: On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer…
A: Workings: On December 31 , 2017 forward rate fair value calculation: 100000 x ( 0.20 - 0.17 ) x…
Q: On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two- year,…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactions…
A: Forward contract is entered for hedging the foreign exchange risk or speculation purpose . in this…
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: A. Inventory = 110,000 pesos × 0.19 × 40%(as 60% is sold) = $8360
Q: During December of the current year, Exide company based in America, entered into the following…
A:
Q: Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactions…
A: Forward exchange contract: It is an agreement to exchange different currencies at a specified future…
Q: On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year,…
A: a. Date Account Titles and Explanation Debit Credit 30 Sep 2020 Cash $256,000 Loan…
Q: On 12 August, a Commonwealth Bank dealer in Melbourne concluded a transaction with a Citibank dealer…
A: Given, Contract amount = USD5,000,000 Exchange rate AUD/USD = 0.50 Delivery date = August 14…
Q: As expected, ABC receives the goods from the supplier on April 30, 2021 and pays 100,000 yuan…
A: Forward Contact The implication of forward contract which can be easily overcome the risk of…
Q: On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two- year,…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
Q: HH Inc. had the following transactions: • On May 1, HH purchased parts from a foreign company (FC1)…
A: 1.
Q: On September 30, 2017, Ericson Company negotiated a two-year, 1,000,000 dudek loan from a foreign…
A: a. Prepare all journal entries related to this foreign currency borrowing.
Q: On November 15, 2020, Celt, Inc., a Philippine company located in Baguio City, ordered merchandise…
A: The foreign exchange gain is 4,000. Date Particulars Debit Date Particulars Credit…
Q: On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to…
A: Currency Exchange rate: Currency exchange rate is the cost incurred to purchase one unit of currency…
Q: Matthias Corp. had the following foreign currency transactions during 2020: Purchased…
A: Gain on payment of merchandise purchased = Amount paid on April 20 - Value on January 20 = 51,400…
Q: 1. On November 1, 2020, an entity acquired on account goods from a foreign supplier at a cost of…
A: Carrying amount of monetary asset means carrying amount of accounts receivable.
Q: On December 5, 20X8, Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for…
A: International trade includes the trade of the company with the company which is located outside the…
Q: STARLA Company sold merchandise for 30,000 pounds to a customer in London on December 1, 2020.…
A: A foreign currency transaction shall be recorded using the exchange rate prevalent on the date of…
Q: Brief, Inc., had a receivable from a foreign customer that is payable in the customer's local…
A: Foreign exchange gain = U.S. dollar equivalent on February 15, 2021 - U.S. dollar equivalent on…
Q: On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign…
A: Date Account Titles and Explanation Debit Credit December 15, 2017 Inventory…
Q: On October 15, 2009, Talud Lim ited, a Canadian company, sold a custom er in England for €10,000,…
A: Sale of machinery on Credit basis on 15th October 2009: Debtors A/c Dr. (10000*$2.20) 22,000 $…
Q: Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1,…
A: The question is related Forward Contract Accounting. The Icebreaker has purchase goods on December…
Q: On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year,…
A: Foreign exchange works as a medium of identifying the value of one country’s currency in another…
Q: On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer…
A: Sales on November 1 , 2017 : = 180000 * 0.29 = 52200
Q: Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1,…
A: Hedging is an instrument through which the risk of changes in foreign currency can be mitigated.…
Q: Apex Ltd, is a computer software manufacturing company based in the United States of America (USA).…
A: According to IAS 21 foreign exchange the transaction is been recorded.
Q: Leigh of New York sells its products to customers in the United States and the United Kingdom. On…
A: Prepare journal entries on the given dates as follows: result:
Q: Clark Co., a U.S. corporation, sold inventory on December 1, 2021, with payment of 12,000 British…
A: Sales is the revenue proceeds from sale of goods and services. It should be recorded when goods and…
Q: On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a…
A: If a person sells goods in other country than foreign exchange rates impacts on its financials…
Q: On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year,…
A: Introduction: Borrowing costs are the interest payments on a loan or mortgage. It is the amount paid…
Q: Brandlin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with…
A: A forward contract is made to sell or buy a definite number of securities at a fixed price to the…
Q: FinnCo purchases goods from its Mexican supplier on 1 November 20X1; the purchaseprice is 100,000…
A: Step 1 The difference due to foreign exchange will be recognized on profit and loss account as a…
Q: On March 1, Pimlico Corporation (a U.S.-based company) expects to order merchandise from a supplier…
A:
Q: On September 1, 2020, Bain Corp. received an order for equipment from a foreign customer for 300,000…
A: Foreign Currency: It is the conversion of one country's currency into another. In a free economy, a…
Q: ) Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local…
A: If any entity has transactions that are denominated in a currency other than its functional currency…
Q: On March 1, Forward Import-Export Company purchased merchandise costing 70,100 Mexican pesos.…
A: Financial Accounting: It refers to the process of recording the financial transactions of the…
On March 1, 2019, a U.S. company made a credit sale requiring payment in 30 days from a Malaysian
company, Hamac Sdn. Bhd., of 20,000 Malaysian ringgits. Assuming the exchange rate between Malaysian
ringgits and U.S. dollars is $0.4538 on March 1 and $0.4899 on March 31, prepare the entries to record
the sale on March 1 and the cash receipt on March 31.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
- Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2019 and 2020. 2019 Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.1043 on this day. July 21 Sold merchandise on credit to Sumito Corp. in Japan. The price of 1.5 million yen is to be paid 120 days from the date of sale. The exchange rate for yen is $0.0094 on this day. Oct. 14 Sold merchandise for 19,000 pounds to Smithers Ltd. of Great Britain, payment in full to be received in 90 days. The exchange rate for pounds is $1.4566 on this day. Nov. 18 Received Sumito’s payment in yen for its July 21 purchase and immediately exchanged the yen for dollars. The exchange rate for yen is $0.0092 on this day. Dec. 20 Sold merchandise for 17,000 ringgits to Hamid Albar of Malaysia, payment in full to be received in 30 days. On this day, the exchange rate for ringgits is $0.4501. Dec. 31 Recorded adjusting entries…Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2019, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 17,000 pounds. The exchange rate on that day for £1 was $1.4583. On December 31, 2019, when Leigh prepared its financial statements, the rate was £1 for $1.4382. Bronson paid its bill in full on January 15, 2020, at which time the exchange rate was £1 for $1.4482. Leigh immediately exchanged the 17,000 pounds for U.S. dollars. Prepare Leigh’s journal entries on December 16, December 31, and January 15 (round to the nearest dollar).Local Corp imported a heavy machine from the US for US$50,000 on October 10, 2019. A letter of credit was opened with a Makati branch based on the commercial invoice for US$50,000, on which Local Corpl made a 100% deposit cover based on the exchange rate of $1.00 to P27.50. Shipment of the heavy machine was effected on December 30, 2019, at which time the exporter collected the proceeds of the letter of credit when the prevailing exchange rate was $1.00 to P28.00. From the exchange rate fluctuation, Local Corp realized: Group of answer choices A. P25,000 gain B.P25,000 loss C. P5,000 gain D. No gain, No loss
- On May 8, 2019, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The terms of the sale required Lopez to pay 800,000 pesos on February 10, 2020. Jett prepares quarterly financial statements on March 31, June 30, September 30, and December 31. The exchange rates for pesos during the time the receivable is outstanding follow. Compute the foreign exchange gain or loss that Jett should report on each of its quarterly income statements for the last three quarters of 2019 and the first quarter of 2020. Also compute the amount reported on Jett’s balance sheets at the end of each of its last three quarters of 2019. May 8, 2019 . $0.1323 June 30, 2019 . 0.1352 September 30, 2019 . 0.1368 December 31, 2019 0.1335 February 10, 2020 . 0.1386On September 1, 2020, Creed Co. sold merchandise to a foreign entity for 250,000 francs. Terms of the sale require payment in francs on February 1, 2021. On September 1, 2020, the spot exchange rate was P1.2 per franc. On December 31, 2020, the spot rate was P1.19, but the rate increased to P1.22 by February 1, 2021, when payment was received. Required: Provide journal entries in 2020 and 2021.On 1 July 2019 Celine Consultants Ltd completes a contract to provide advice on the installation of a networked computer system to a company in the US. The client pays the fee of US$700 000 into Celine Consultants’ US bank account on that date. The bank pays interest of 5 per cent annually on 30 June. The exchange rate information is: 1 July 2019 $A1 = US$0.59 30 June 2020 $A1 = US$0.67 What journal entries are required in Celine Consultants Ltd’s books for 1 July 2019 and 30 June 2020
- Matthias Corp. had the following foreign currency transactions during 2020: Purchased merchandise from a foreign supplier on January 20 for the U.S. dollar equivalent of $63,200 and paid the invoice on April 20 at the U.S. dollar equivalent of $51,400. On September 1, borrowed the U.S. dollar equivalent of $304,000 evidenced by a note that is payable in the lender's local currency in one year. On December 31, the U.S. dollar equivalent of the principal amount was $326,000. In Matthias’s 2020 income statement, what amount should be included as a net foreign exchange gain or loss? Multiple Choice $10,200 loss $22,000 gain $33,800 loss $11,800 gainIcebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 16,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 16,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $2.70 $2.775 December 31, 2020 2.80 2.900 March 1, 2021 2.95 N/A Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. Record the purchase of materials. Record the forward contract. Record the entry to revalue the foreign currency account payable. Record the change in the fair value of the forward contract. Record the…On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign supplier for 50,000 schillings. Lisbeth agrees to pay in 45 days after it sells the merchandise. Lisbeth makes sales rather quickly and pays the entire obligation on January 25, 2018. Currency exchange rates for 1 schilling are as follows:Prepare all journal entries for Lisbeth Company in connection with this purchase and payment.
- cebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 12,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 12,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $ 3.00 $ 3.075 December 31, 2020 3.10 3.200 March 1, 2021 3.25 N/A a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. Record the purchase of materials. 2 Record the forward contract. 3 Record the entry to revalue the foreign currency account payable. 4 Record the change in…Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 16,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 16,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $2.70 $2.775 December 31, 2020 2.80 2.900 March 1, 2021 2.95 N/A A. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars.cebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 29,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 29,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $ 4.70 $ 4.775 December 31, 2020 4.80 4.900 March 1, 2021 4.95 N/A a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods?…