A U.S. company purchases medical lab equipment from a Japanese company. The Japanese company requires payment in Japanese yen. In this transaction, the dollar would be referred to as the ___________ currency.
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A U.S. company purchases medical lab equipment from a Japanese company. The Japanese company requires payment in Japanese yen. In this transaction, the dollar would be referred to as the ___________ currency.
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measurement |
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denominated |
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purchasing |
d. |
selling |
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- Vitamin, Inc. is a U.S.-based manufacturer and wholesaler. On 10/15/20x1, Vitamin made its first international sale. They sold $450,000 of products to a non-U.S. customer. Vitamin, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC. To avoid a penalty, the foreign buyer must make payment to Vitamin by February 2, 20x2. At the time of the sale, the FC/$ spot rate was FC1.97=$1 Vitamin, Inc. has a December 31 year-end. At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1. Required: For Vitamin, Inc., Give the journal entries for the 10/15/20x1 sale. Give the journal entries for the foreign currency sale at 12/31/ 20x1, when the company closes its books and prepares its financial statements. Give the journal entries for the receipt of payment on the sale on 2/2/20x2. At that date, the foreign currency spot rate was FC 2.00 = $1.If an American purchases a ticket from Scandinavian Airlines, paying by a personal check, which of the following entries would be the result? Group of answer choices a. a credit in Norway's service account b. a debit in Norway's service account c. a credit in the U.S. unilateral transfers account d. a debit in the U.S. unilateral transfers accountABC beauty Group, incorporated in China, has its head office in China. It operates several beauty retailing shops in China, Malaysia and Indonesia, and the operations are financed by local letters of credit or bank loans from the respective location. ABC sources its beauty products from France and United States and settles payable in euros and US Dollar. All the net cash inflows after deducted the local operating expenses are remitted to China. Required: Discuss which currency should be used as ABC’s functional currency
- You are given the exchange rate between the U.S. dollar and the Canadian dollar. You are also given the exchange rate between the U.S. dollar and the Mexican peso. What is the name given to the Canadian dollar per Mexican peso exchange rate derived from the information that was provided? A. Swap rate B. Depositary rate C. Forward rate D. London Interbank rate E. Cross-rateBanana, Inc. is a U.S.-based manufacturer and wholesaler. On 10/15/20x1, Banana made its first international sale. They sold $450,000 of products to a non-U.S. customer. Banana, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC. To avoid a penalty, the foreign buyer must make payment to Banana by February 2, 20x2. At the time of the sale, the FC/$ spot rate was FC1.97=$1 Banana, Inc. has a December 31 year-end. At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1. Required: Give the journal entries for the receipt of payment on the sale on 2/2/20x2. At that date, the foreign currency spot rate was FC 2.00 = $1.The theory of purchasing power parity (PPP) states that in the long-run exchange rates between two countries adjusts so that the price of an identical good is the same when expressed in the same currency. A scanner sells for $65.45 in the United States. The exchange rate between the U.S. dollar and the Swiss franc (SFr) is $0.8245 per Swiss franc. Assuming that PPP holds true, how much does the same scanner cost in Switzerland? SFr 95.26 SFr 83.35 SFr 99.23 SFr 79.38
- Question 1 ABC Corp. is a domestic corporation. It sold goods to XYZ Corp., a PEZA-registered export enterprise based in Cavite Economic Zone. ABC Corp. billed XYZ Corp. Php 1,000,000 upon delivery to XYZ Corp. XYZ Corp. paid Php 1,000,000. Subsequently, XYZ Corp. exported the goods to GHI Corp. based in the United States. The sale by ABC Corp. is: Group of answer choices a. Subject to 12% VAT b. Subject to 0% VAT c. VAT-exempt d. Subject to percentage taxVitamin, Inc. is a U.S.-based manufacturer and wholesaler. On 10/15/20x1, Almira made its first international sale. They sold $450,000 of products to a non-U.S. customer. Vitamin, Inc. agreed to allow the customer to pay for the purchase in its own currency, the FC. To avoid a penalty, the foreign buyer must make payment to Vitamin by February 2, 20x2. At the time of the sale, the FC/$ spot rate was FC1.97=$1 Vitamin, Inc. has a December 31 year-end. At 12/31/20x1, the foreign currency spot rate was FC1.95 = $1. Required: Explain how Vitamin, Inc. can use: (a) forward exchange contracts and (b) foreign exchange options their foreign currency risk. In your explanation, discuss the type of: (a) forward exchange contract or (b) foreign currency option contracts, they would obtain to hedge their foreign currency risk. No journal entries are required. For Vitamin, Inc.’s foreign customer, explain the type of foreign currency risk the s/he accepts relating to their purchase from…Case 1 ABC beauty Group, incorporated in China, has its head office in China. It operates several beauty retailing shops in China, Malaysia and Indonesia, and the operations are financed by local letters of credit or bank loans from the respective location. ABC sources its beauty products from France and United States and settles payable in euros and US Dollar. All the net cash inflows after deducted the local operating expenses are remitted to China. Required:Which currency should be used as ABC’s functional currency based on IAS 21?
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