a
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The indirect exchange rate for Australian dollars on December 1, 20X5 and December 31, 20X5.
b
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The balance in the account foreign currency payable to exchange broker in the adjusted
c
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The direct exchange rate when D entered into the 60-day forward contract to sell A$70,000.
d
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The amount of dollars receivable from exchange broker in the adjusted trial balance.
e
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The indirect exchange rate for South Korean won on October 2, 20X5, and what was the indirect exchange rate on December 31, 20X5.
f
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The balance in the dollar payable account to exchange broker in both the unadjusted and the adjusted trial balance
g
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The direct exchange rate for 120 days forward contract when D purchase KRW400,000
h
Introduction: Foreign currency transactions include sales, purchases, or any transaction that involves the exchange of foreign currency. As the financial statements of all U.S.-based companies are prepared using the U.S. dollar, any transaction that takes place in non-U.S dollar currency must be translated to U.S. dollars for the purpose of accounting it. Subsidiaries and branches of U.S. companies having multinational operations must also translate their financial statements to U.S dollars.
The Accounts payable balance at December 31, 20X5.
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Advanced Financial Accounting
- On December 1, Y1, AAA, a US based company, entered into a three months forward contract to purchase 1 million foreign currency FC, on March 1, Y2. The following US per FC exchange rates apply: Date Spot Rate Forward Rate December 1, Y1 $0.088 $0.084 December 31, Y1 $ 0.080 $0.074 March 1, Y2 $0.076 AAA borrowing rate is 12%. The present value factor for 2 months at an annual rate is 0.9803. How would AAA report the forward contract on its balance sheet on December 31, Y1? Justify your answer and show your calculations. 3 pts As a liability of 9,803. 1,000,000 x (0.084-0.074) = 10,000 x 0.9803 = 9803arrow_forwardForeign currency transactions Use the following information for the next two questions: On December 1, 20x1, Entity A sells good to Entity B, on credit, for a total sale price of $1,000. Entity B settles the account on January 6, 20x1. Entity A's functional currency is the Philippine peso (P). The relevant exchange rate are as follows: Dec. 1, 20x1 Dec. 31, 20x1 Jan. 6, 20x1 P50:$1 P52:$1 P41:$1 How much is the foreign exchange gain (loss) to be recognized by Entity A on December 31, 20x1?arrow_forwardRecording Export Transactions Daisy Brands, a U.S. company, sells items abroad. Daisy prices many of these transactions in the currency of the customer. Following are four such transactions made in the last accounting period, plus the direct exchange rates for each date: Country Amount Currency Spot rate at sale Spot rate at collection Argentina . . . . . . . . . . . . . . . . . . . . . . 250,000 Peso $0.056 $0.049 Canada . . . . . . . . . . . . . . . . . . . . . . . . 400,000 Dollar 0.732 0.713 India . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 Rupee 0.016 0.018 South Africa . . . . . . . . . . . . . . . . . . . . 100,000 Rand 0.074 0.077 Required Prepare the journal entries made by Daisy Brands to record the above sale and collection transactionsarrow_forward
- Peerless Corporation (a U.S.-based company) made a sale to a foreign customer on September 15, for 107,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: Date U. 5. Dollar per Crown September 15.5 0.60 September 30 0.66 October 15.0.61 Prepare all journal entries for Peerless Corporation in connection with this export sale, assuming that the company closes its books on September 30 to prepare interim financial statementsarrow_forwardPeerless Corporation (a U.S.-based company) made a sale to a foreign customer on September 15, for 104,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: Date September 15 September 30 October 15 U.S. Dollar per Crown $ 0.61 0.65 0.61 Required: Prepare all journal entries for Peerless Corporation in connection with this export sale, assuming that the company closes its books on September 30 to prepare interim financial statements. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.arrow_forwardRecording Import Transactions Pinnacle Foods imports a variety of items for resale to U.S. retail‑ ers. Following is a description of purchases and foreign‑currency‑denominated payments made in the last accounting period, plus the direct exchange rates for each date: Country Amount Currency Spot rate at purchase Spot rate at payment Australia . . . . . . . . . . . . . . . . . . 200,000 Australian dollar $0.7600 $0.7300 Thailand . . . . . . . . . . . . . . . . . . 800,000 Baht 0.0345 0.0365 Hong Kong . . . . . . . . . . . . . . . . 5,000,000 Hong Kong dollar 0.1319 0.1362 Jordan . . . . . . . . . . . . . . . . . . . 500,000 Dinar 1.4100 1.3900 Required Prepare the journal entries made by Pinnacle, a U.S. company, to record the above purchase and payment transaction.arrow_forward
- (a) ABC Co has a year end of 31 December 20X1 and uses the dollar ($) as its functional currency. On 25 October 20X1 ABC Co buys goods from a Swedish supplier for Swedish Krona (SWK) 286,000. Rates of exchange: 25 October 20X1 $1 = SWK 11.16 16 November 20X1 $1 = SWK 10.87 31 December 20X1 $1 = SWK 11.02 Required: Show the accounting treatment for the above transactions if: (a) A payment of SWK286,000 is made on 16 November 20X1. (b) The amount owed remains outstanding at the year-end date.arrow_forwardGreenView Company's receivable from a foreign customer is denominated in the customers local currency, the Brazilian Real (BRL). This receivable totaled 900,000 BRL and was translated to $300,000 at December 31, 20X5. On January 31, 20X6, the receivable was collected from the customer at an exchange rate of 4 BRL to $1. What journal entry should GreenView record in January? Dr. Foreign currency units 300,000 Cr. Accounts receivable Dr. Foreign currency units 225,000 2. Cr. Accounts receivable 01. 03. 4. Dr. Foreign currency units 300,000 Cr. Exchange gain Cr. Accounts receivable Dr. Foreign currency units Dr. Exchange loss Cr. Accounts receivable 225,000 75,000 300,000 225,000 75,000 225,000 300,000arrow_forwardForeign currency transactions Melbourne Ltd purchased goods from France on 3 April 2022 on credit shipped FOB Paris. The cost of good is Euro 500,000 and outstanding as of 31 April 2021. On 3 April 2022, the exchange rate is A$1.00 = Euro 0.67. On 30 April 2022, exchange rate is A$1.00 = Euro 0.66 REQUIRED Provide the accounting entries necessary to account for the above purchase transaction for the month ending 30 April 2022.arrow_forward
- 2 XYZ Company sells goods to a foreign customer on June 8. Payment of 3,000,000 foreign currency units (FC) is due in one month. June 30 is XYZ Company’s fiscal year-end. The following exchange rates were in effect during the period: June 8 Spot rate $1.10 June 8 30 day forward rate $1.15 June 30 Spot rate $1.14 July 8 Spot rate $1.20 A For what amount should XYZ Accounts Receivable be debited on June 8 B How much foreign exchange gain or loss should XYZ record on June 30arrow_forwardOn 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.arrow_forward3. On October 1, IJR International received an order from a Japanese customer for 2,500,000 Yen to be paid upon receipt of the goods, scheduled for December 1. The rates for $1 US are as follows: Spot rate, October 1 Forward rate, December 1 Spot rate, December 1 Exchange Rates for $1 for Yen 83 82 81 (a) Calculate what IJR would receive from the Japanese customer in US dollars using the spot rate at the time of the order. (b) Calculate what IJR would receive from the Japanese customer in US dollars using the spot rate at the time of payment. (c) Calculate the amount that IJR expects to receive on December 1 if IJR's policy is to hedge foreign currency transactions. (d) How can IJR protect itself from the risk of the transaction?arrow_forward
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