Carl Inc. purchased inventory on September 12, 2017 from a foreign customer for 750,000 units of foreign currency (FC) due on January 12, 2018. Simultaneously, the company entered into a forward contract for 750,000 units of FC for delivery on January 12, 2018 at the forward rate of $1.03. Payment was made to the foreign customer on January 12, 2018. The company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Date Spot Rate (Delivery on 1/12/2018) 9/12/2017 1.01 1.03 12/31/2017 1.08 1.09 1/12/2018 1.05 Notes: Read carefully and follow strictly so that Bb can grade you correctly!1. Use comma in numbers, one thousand is 1,000, not 1000. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign.2. If no entry is required, write N/A.3. Only use the following accounts: Inventory, A/P (FC), A/R (FC), Cash, Sales, CGS, Exchange G/L, Fwd Contract, Contract G/L, Contract G/L (OCI), Firm CMMT, CMMT G/L.4. Copy account names accurately to receive credits, names are not case sensitive.5. Remember: do ALL buy/sell transaction entries first, then financing management entries later.
Carl Inc. purchased inventory on September 12, 2017 from a foreign customer for 750,000 units of foreign currency (FC) due on January 12, 2018. Simultaneously, the company entered into a forward contract for 750,000 units of FC for delivery on January 12, 2018 at the forward rate of $1.03. Payment was made to the foreign customer on January 12, 2018. The company ends its fiscal year on December 31. The following exchange rates were quoted:
|
Forward Rate |
||
|
Date |
Spot Rate |
(Delivery on 1/12/2018) |
|
9/12/2017 |
1.01 |
1.03 |
|
12/31/2017 |
1.08 |
1.09 |
|
1/12/2018 |
1.05 |
Notes: Read carefully and follow strictly so that Bb can grade you correctly!
1. Use comma in numbers, one thousand is 1,000, not 1000. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign.
2. If no entry is required, write N/A.
3. Only use the following accounts: Inventory, A/P (FC), A/R (FC), Cash, Sales, CGS, Exchange G/L, Fwd Contract, Contract G/L, Contract G/L (OCI), Firm CMMT, CMMT G/L.
4. Copy account names accurately to receive credits, names are not case sensitive.
5. Remember: do ALL buy/sell transaction entries first, then financing management entries later.
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