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(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:
(b) The amount owed remains outstanding at the year-end date.
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- [The following information applies to the questions displayed below.] Select the correct answer for each of the following questions. Note: Items 3 through 5 are based on the following: On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows: Spot Rate Forward Rate for March 12, 20X6 December 12, 20X5 $ 0.88 $ 0.90 December 31, 20X5 0.98 0.93 3. Dahl entered into the first forward contract to manage the foreign currency risk from a purchase of inventory in November 20X5, payable in March 20X6. The forward contract is not designated as a hedge. At December 31, 20X5, what amount of foreign currency transaction gain should Dahl include in income from this forward contract? multiple choice $10,000 $0 $5,000 $3,000On December 1, 20X1, Rone Imports, a U.S. company, purchased clocks from Switzerland for 15,000 francs (SFr) to be paid on January 15, 20X2. Rone’s fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are December 1, 20X1 1 SFr = $0.70 December 31, 20X1 1 SFr = 0.66 January 15, 20X2 1 SFr = 0.68 Required: In which currency is the transaction denominated? Prepare journal entries for Rone to record the purchase, the adjustment on December 31, and the settlemenThe correct answer is shownl. Please show solutions why.
- 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…23.Full concept
- On June 1, a calendar year U.S. manufacturer sells, on 60-day credit, goods to Oman importer for US$ 1,000,000. The Dollar/Rial exchange rate is OMR 1 = US$ 0.40 on June 1, and OMR 1 = $ 0.39 on August 1. Required: Prepare dated journal entries in Oman Rials to record the incurrence and settlement of this foreign currency transaction assuming It employs a two-transaction perspective.[The following information applies to the questions displayed below.] Select the correct answer for each of the following questions. Note: Items 3 through 5 are based on the following: On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows: Spot Rate Forward Rate for March 12, 20X6 December 12, 20X5 $ 0.88 $ 0.90 December 31, 20X5 0.98 0.93 2. On September 1, 20X5, Johnson Incorporated entered into a foreign exchange contract for speculative purposes by purchasing €50,000 for delivery in 60 days. The rates to exchange U.S. dollars for euros follow: 9/1/X5 9/30/X5 Spot rates $ 0.75 $ 0.70 30-day forward rate 0.73 0.72 60-day forward rate 0.74 0.73 In its September 30, 20X5, income statement, what amount should Johnson report as foreign exchange loss? multiple choice $2,500 $500 $1,500 $1,000On December 1, 2022, GAZA Company purchased Equipment from Ispanya by 100,000 Euro payable on March 31, 2023. At the same time GAZA entered into a 120-day forward contract with :ALQUDS Bank to purchase 100,000 Euro in March 31, 2023 to hedge risk of changes in exchange rates. GAZA's fiscal year ends on December 31. The direct exchange rates follow Date Spot Rate Forward Rate December 1, 20X1 December 31, 20X1 0.600 0.610 0.609 0.612 March 31, 20X2 0.602 Required: Prepare all journal entries for GAZA
- Accounting Car Corp. (a U.S.-based company) sold parts to a Japanese customer on December 1, 2020, with payment of 10 million Japanese yen to be received on January 31, 2021. The following exchange rates applied: Date Spot rate Forward rate to 01/31/21 0.00090 0.00093 0.00092 0.00098 0.00095 December 1, 2020 December 31, 2020 January 31, 2021 Assuming a forward contract was entered into, what would be the net impact on Car Corp.'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. A. $295.05 (loss). B. $ 300 (gain). C. $ 300 (loss). D. $ 700 (gain). E. $ 700 (loss). 0.00095Please Correct solution with Explanation and Do not Give solution in image formatAs a foreign exchange trader at a Citibank, you are given the following quotations: 1-month 2-month Exchange Rate Spot Rate forward forward 1 Singapore Dollar (S$) 100 Japanese Yen (100¥) 1 Australian Dollar (AUD) RM3.0500/10 RM3.5000/30 RM3.1010/40 20/70 25/65 45/35 60/50 35/70 65/55 Country Malaysia Japan Singapore Rate 15% 3-Month interest rate 10% 20% Calculate: iii. If the bank's customer wishes to buy ¥200,000 in 2 months' time, how much he must pay in RM?
