Please Do not Give image format Wolfe Computer is a U.S. company that manufactures portable personal computers. Many of the components for thecomputer are purchased abroad, and the finished product is sold in foreign countries as well as in the United States.Among the recent transactions of Wolfe are the following:Oct.28 Purchased from Mitsutonka, a Japanese company, 20,000 disk drives. The purchase price was¥183,000,000, payable in 30 days. Current exchange rate, $0.0105 per yen. (Wolfe uses the perpetualinventory method; debit the Inventory of Raw Materials account.)Nov. 9 Sold 700 personal computers to the Bank of England for £657,576 due in 30 days. The cost of thecomputers, to be debited to the Cost of Goods Sold account, was $518,000. Current exchange rate,$1.65 per British pound. (Use one compound journal entry to record the sale and the cost of goodssold. In recording the cost of goods sold, credit Inventory of Finished Goods.)Nov. 27Issued a check to Inland Bank for $1,836,000 in full payment of account payable to Mitsutonka.Dec. 2 Purchased 10,000 gray-scale monitors from German Optical for €1,150,000, payable in 60 days. Currentexchange rate, $0.7030 per euro. (Debit Inventory of Raw Materials.)Dec. 9 Collected dollar-equivalent of £657,576 from the Bank of England. Current exchange rate, $1.63 perBritish pound.Dec.11 Sold 10,000 personal computers to Computique, a Swiss retail chain, for SFr25,833,333, due in 30days. Current exchange rate, $0.6000 per Swiss franc. The cost of the computers, to be debited toCost of Goods Sold and credited to Inventory of Finished Goods, is $7,400,000.Required:a. Prepare in general journal form the entries necessary to record the preceding transactions.b. Prepare the adjusting entries needed at December 31 for the €1,150,000 account payable to German Optical and theSFr25,833,333 account receivable from Computique. Year-end exchange rates, $0.7000 per euro and $0.5980 per Swissfranc. (Use a separate journal entry to adjust each account balance.)c. Compute the unit sales price of computers in U.S. dollars in either the November 9 or December 11 sales transaction.(The sales price is the same in each transaction.)d. Compute the exchange rate for the yen, stated in U.S. dollars, on November 27.

A financial transaction's record in an organization's accounting system is called a journal entry.…

a. Prepare in general journal form the entries necessary to record the preceding transactions. b. Prepare the adjusting entries needed at December 31 for the €1,150,000 account payable to German Optical and the SFr25,833,333 account receivable from Computique. Year-end exchange rates, $0.7000 per euro and $0.5980 per Swiss franc. (Use a separate journal entry to adjust each account balance.) c. Compute the unit sales price of computers in U.S. dollars in either the November 9 or December 11 sales transaction. (The sales price is the same in each transaction.) d. Compute the exchange rate for the yen, stated in U.S. dollars, on November 27.

a. Prepare in general journal form the entries necessary to record the preceding transactions. b. Prepare the adjusting entries needed at December 31 for the €1,150,000 account payable to German Optical and the SFr25,833,333 account receivable from Computique. Year-end exchange rates, $0.7000 per euro and $0.5980 per Swiss franc. (Use a separate journal entry to adjust each account balance.) c. Compute the unit sales price of computers in U.S. dollars in either the November 9 or December 11 sales transaction. (The sales price is the same in each transaction.) d. Compute the exchange rate for the yen, stated in U.S. dollars, on November 27.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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).
National Co. is residing in Spain and exports bottles of wine in its Mexican Market for 225 Mexican Peso each bottle which costs National Co. 50 Pounds from wine distillery in United Kingdom. Exchange rates identified are the following for June 10, 2022:· 1 Euro = 15 Mexican Peso = 10 PoundsHow much total gross profit in Euro does National Co. made for June 10, 2022 considering the firm exported 3,000 wine bottles?
BIC Co. is residing in Spain and exports bottles of wine in its Mexican Market for 225 Mexican Peso each bottle which costs BIC Co. 50 Pounds from wine distillery in United Kingdom. Exchange rates identified are the following for June 10, 2022:· 1 Euro = 15 Mexican Peso = 10 PoundsHow much total gross profit in Euro doesBIC Co. made for June 10, 2022 considering the firm exported 3,000 wine bottles?
Fergusson Corporation, a U.S. company, manufactures components for the automobile industry. In the past, Fergusson purchased actuators used in its products from a supplier in the United States. The company plans to shift its purchases to a supplier in Portugal. Fergusson's CFO expects to place an order with the Portuguese supplier in the amount of 200,000 euros in three months. In contemplation of this future import, the CFO purchased a euro call option to hedge the cash flow risk that the euro appreciate against the U.S. dollar over the next three months. The CFO is aware that a foreign currency option used to hedge the cash flow risk associated with a forecasted foreign currency transaction may be designated as a hedge for accounting purposes only if the forecasted transaction is probable. However, he is unsure how he should demonstrate that the anticipated import purchase from Portugal is likely to occur. He wonders whether management's intention to make the purchase is…
A company manufactures a product in the United States and sells it in England. The unit cost of manufacturing is $52. The current exchange rate (dollars per pound) is 1.213. The demand function, which indicates how many units the company can sell in England as a function of price (in pounds) is of the power type, with constant 27556733 and exponent -2.5. A) Develop a model for the company's profit (in dollars) as a function of the price it charges (in pounds). Then use a data table to find the profit-maximizing price to the nearest pound. Assume that the price ranges from £45 to £100 in increments of £1. Round your answer for the maximum profit to the nearest dollar and your answer for the best price to the nearest pound. 1. Maximum profit: $______ 2. Best price: £ ______
Global Electronics Inc. invested $1,000,000 to build a plant in a foreign country. The labor and materials used in production are purchased locally. The plant expansion was estimated to pro-duce an internal rate of return of 20% in U.S. dollar terms. Due to a currency crisis, the currency exchange rate between the local currency and the U.S. dollar doubled from two local units per U.S. dollar to four local units per U.S. dollar. Write a brief memo to the chief financial officer, Tom Greene, explaining the impact that the currency exchange rate change would have on the project’s internal rate of return if (1) the plant produced and sold product in the local economy only, and (2) the plant produced all product locally and exported all product to the United States for sale.
MMA plc., is a UK-based manufacturer of heavy machine components for the power industry. MMA exports a significant proportion of its products to clients in the US. In order to compete with other US suppliers of heavy machine components, MMA prices its exports in US dollars. It is March 2021 and MMA has just shipped a large consignment worth $50 million to TLP Inc., one of MMA’s major clients in the US. Payment for this shipment is due in 90-days. MMA treasury department is concerned about the recent volatility of the dollar[1]pound exchange rates and has suggested that its exposure to the US dollar should be hedged. The following currency and money market quotes are available today: Spot Rate (bid – ask): US$1.5077/£ - US$1.5379/£ Barclays 90-day forward quote ((bid – ask): US$1.5025/£ - US$1.5432 90-day dollar deposit interest rate: 0.8% per annum 90-day pound deposit interest: 1.2% per annum 90-day US dollar borrowing rate: 1.2% per annum 90-day pound borrowing rate: 1.8% per annum…
Your firm is a U.S.-based supplier of agricultural parts. A European customer just made a €50,000 purchase on trade credit terms of net 30 days. At the time of the sale, the exchange rate was EUR/USD 1.19. The projected exchange rate in 30 days is EUR/USD 1.21. Calculate the value of accounts receivable on the date of the sale. a. $41,322.31 b. $42,016.81 C. $59,500.00 d. $60,500.00
Suppose that Nevada Co., a US-based MNC, makes regular, monthly purchases of materials from a German supplier named Spicurity. These regular payments are typically in the amount of 250,000 euros. Last month the exchange rate was $1.44 per euro. Nevada Co. only has cash reserves in dollars, while Spicurity only has cash reserves in euros. Suppose both companies use the same bank. In order to conduct this transaction last month, Nevada Co. required $ transaction reduced Nevada's account by this amount, denominated in dollars and credited it to Spicurity's account. 360,000.00 to pay for the materials. Thus, the bank handling the The bank then converted this amount to M
Ganado Corporation recently received a payment for one of the consignments it exported to Europe, It has 2,000 Euros (€ or EUR) with it. Wanting to exchange all of these for Russian rubles(R or RUB) since it will be importing a new machine from a merchant in Russia, it obtains the following quotes: Spot rate USD=1.00 EUR (or $/€) Spot rate RUB=1.00 USD (or R/S) a. What is the Russian ruble to euro crossrate? b. How many Russian rubles will you obtain for your Euros? 1.1280 62.40
IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed 1500 million payable in three months. Currently, the spot exchange rate is ¥110/$ and the three-month forward rate is ¥100/S. The three-month money market interest rate is 12 percent per annum in the United States and 9 percent per annum in Japan. The management of IBM decided to use a money market hedge to deal with this yen account payable a. Explain the process of a money market hedge and compute the dollar cost of meeting the yen obligation b. Conduct a cash flow analysis of the money market hedge
Phillips NV produces DVD players and exports them to the United States. Last year the exchange rate was $1.25/euro and Phillips charged 120 euro per player in Euroland and $150 per DVD player in the United States. Currently the spot exchange rate is $1.65/euro and Phillips is charging $180 per DVD player. What is the degree of pass through by Phillips NV on their DVD players? 32% 62.5% O 4.1% O 20.0%