in the United States. The invoice price was €4,000,000, and delivery and payment were to be made in 60 days. Concurrently, €4,000,000 was purchased in the forward market for delivery in 60 days at the forward rate of $1.15. The goods were received, payment was made, and the forward contract was settled on August 14, 2020, when the spot rate was $1.13. September 1, 2020: Canned products priced at 3,000,000 zloty were sold to a food distributor in Poland when the spot rate was $0.28. Paymen
in the United States. The invoice price was €4,000,000, and delivery and payment were to be made in 60 days. Concurrently, €4,000,000 was purchased in the forward market for delivery in 60 days at the forward rate of $1.15. The goods were received, payment was made, and the forward contract was settled on August 14, 2020, when the spot rate was $1.13. September 1, 2020: Canned products priced at 3,000,000 zloty were sold to a food distributor in Poland when the spot rate was $0.28. Paymen
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following international transactions were entered into during 2020 by Sysco Corporation, the largest foodservice distributor in North America:
- June 15, 2020: Entered into a firm commitment to purchase frozen pasta entrees from Italy which will be resold in the United States. The invoice price was €4,000,000, and delivery and payment were to be made in 60 days. Concurrently, €4,000,000 was purchased in the forward market for delivery in 60 days at the forward rate of $1.15. The goods were received, payment was made, and the forward contract was settled on August 14, 2020, when the spot rate was $1.13.
- September 1, 2020: Canned products priced at 3,000,000 zloty were sold to a food distributor in Poland when the spot rate was $0.28. Payment was received on November 3, 2020, when the spot rate was $0.26, and the zloty were immediately converted to dollars.
Required
Prepare the 2020
journal entries made by Sysco Corporation relating to the above transactions. Sysco is a calendar year company.
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