If the forward contract was not acquired, record the journal entry to purchase the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles enter o for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
If the forward contract was not acquired, record the journal entry to purchase the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles enter o for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:On October 1, 2024, Cullumber Corporation ordered some equipment from a supplier for 307,000 euros. Delivery and payment are to occur on November 15, 2024. The spot rates on October 1 and November 15, 2024, are $1.20 and $1.30, respectively.
(a)
Assume that Cullumber entered into a forward contract on October 1, 2024, to hedge the firm commitment. The forward rates for euros for November 15 delivery were
October 1
November 15
$1.23
$1.30
Furthermore, assume the equipment was purchased and paid for on November 15. Prepare all journal entries needed to record and settle the hedge and to record the purchase of the equipment. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
Transcribed Image Text:Date
Account Titles and Explanation
(To record gain or loss on foreign currency)
(To record gain or loss on firm commitment)
(To record payment to exchange dealer and receipt of foreign currency)
(To record settlement of firm commitment)
Account Titles and Explanation
Debit
Debit
If the forward contract was not acquired, record the journal entry to purchase the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles a
enter O for the amounts. List debit entry before credit entry)
Credit
Credit
……………
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