January 1.. April 1..... Average for the current year.. December 31 .... $0.60 0.58 0.54
Q: On November 20, 20X5, Diamond Corporation, a calendar-year US corporation, had merchandise delivered…
A: A Foreign Exchange transaction means a sale and purchase transaction is done between two parties in…
Q: Problems 8 and 9 are based on the following information.Newberry, Inc., whose reporting currency is…
A: Calculate the inventory reported on the consolidated balance sheet as follows: Inventory = Inventory…
Q: Voltac Corporation (a US-based company) has the following import/export transactions denominated in…
A: The prices at which you may convert one currency for another are known as foreign exchange rates.…
Q: 1. On September 1, 20X1, Cano & Company, a U.S. corporation, sold merchandise to a foreign firm for…
A: There are foreign exchange transactions that take place on credit so that the amount due is paid at…
Q: Peerless Corporation (a U.S.-based company) made a sale to a foreign customer on September 15, for…
A: Answer:- The amount that may be exchanged for one currency for another is called the exchange rate.…
Q: 8. Clark Stone purchases raw material from its foreign supplier, Rinne Clay, on May 8. Payment of…
A: Lets understand the basics.International trade: When a company purchase raw materials (import) or…
Q: Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina,…
A: Functional currency: Functional currency is defined as the currency of the primary economic…
Q: What amount does Newberry's consolidated balance Multiple Choice $115,500. $117,600. $119,700.…
A: In case of company is having branch and currency of branch is different from head office , the trial…
Q: On May 1, 20X1, Aero Electric Corporation, a U.S. company, purchased goods from Neon Circuit…
A: The objective of the question is to determine the correct journal entries for the forward contract…
Q: Mint Corporation has several transactions with foreign entities. Each transaction is denominated in…
A: ACCOUNTING STANDARD - 11 ACCOUNTING FOR THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES As per AS…
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: Solution: - Notes: - the following notes need to understand before start of calculations as follows…
Q: The January 1 Tristan Narvaja, S.A. (C). Tristan Narvaja, S.A., is the Uruguayan subsidiary of a…
A: When we exclude stock holder's equity and retained earnings from the changes in book value of assets…
Q: Clark Company, a U.S. corporation, sold inventory on December 1, 2022, with payment of 12,000…
A: Lets understand the basics.When purchase or sale of item made in foreign currency then either…
Q: On November 20, 20X5, Diamond Corporation, a calendar-year US corporation, had merchandise delivered…
A: Solution Explanation- Dec 13 20x5 1- Unrealised gain on payable = Initial value - Closing value. =…
Q: Maples Corporation is a Canadian subsidiary of a U.S. parent company. Shown below is the company's…
A: 1. Particulars In CAD $M Translation rate Amt in USD $M Sales 480.7 0.76 365.33 Cost of Goods…
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: The exchange rate arises when a transaction takes place between two countries. It is the value of…
Q: Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S.…
A: Functional currency refers to the primary currency used by the business unit. It relates to the…
Q: Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is…
A: Workings: Calculations:
Q: Gina Corporation is in the process of consolidating the subsidiaries that are in Chile. As the two…
A: Conversion gain or loss is the gain earned or loss incurred by an entity due to the fluctuations in…
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: A. Inventory = 110,000 pesos × 0.19 × 40%(as 60% is sold) = $8360
Q: For what amount should Clark's Accounts Payable be credited on May 8?
A: International trade: When a company purchase raw materials (import) or sells finished goods (export)…
Q: Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 118,000…
A: Journal entry: It is prepared for the financial and non-financial transaction of the business and…
Q: Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated…
A: Inventory includes all the items, merchandise, and raw materials that are used by the business…
Q: Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on…
A: Requirement of the question : Find out the gain or loss due to foreign exchange rate fluctuation in…
Q: 1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar-equivalent value of…
A: Foreign currency transactions in accounting mean those transactions that are denominated by…
Q: Required information Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a…
A: Formula: Cost of goods sold = Pesos inventory x Exchange rate on particular date. Multiplying…
Q: On August 1, Pure Joy Corporation (a U.S.-based importer) placed an order to purchase merchandise…
A: please like the answer your response matters…
Q: Cedar Co., a U.S. corporation, sold inventory on December 1, 2023, with payment of 12,000 British…
A: Foreign Exchange Transaction Gain/Loss refers to the fluctuation in the value of a foreign currency…
Q: Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is…
A: INTRODUCTION: Common stock is a sort of investment reflecting a firm's equity ownership. Other…
Q: Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is…
A: Translation is the process through which the financial statements of a foreign subsidiary are…
Q: ASSUME THAI THE U.S. DOLLAR IS THE FUNCTIONAL CURRENCY. Ruthie Inc. had a debit adjustment of $7900…
A: Net Income: Net Income is the income that is earned during a particular period of time after meeting…
Q: On January 1, Narnevik Corporation formed a subsidiary in a foreign country. On April 1, the…
A: Calculate the inventory balance as follows: Inventory balance = Amount * Exchange rate*%percentage…
Q: Brief, Inc., had a receivable from a foreign customer that is payable in the customer's local…
A: Foreign exchange gain = U.S. dollar equivalent on February 15, 2021 - U.S. dollar equivalent on…
Q: On November 6, 20X7, Zebra Corporation purchased merchandise from an unaffiliated foreign company…
A: The rate at which one country’s currency can be converted into another country’s currency referred…
Q: ASSUME THAT THE LOCAL CURRENCY UNIT IS THE FUNCTIONAL CURRENCY. Cade Inc. had a debit adjustment of…
A: Net Income is the income that is earned during a particular period of time after meeting all the…
Q: On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign…
A: Prepare all journal entries for company L.
Q: Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S.…
A: Balance sheet: This financial statement reports a company’s resources (assets) and claims of…
Q: olfe Company (a U.S.-based company) has a subsidiary in Nigeria, where the local currency unit is…
A: The question is based on the concept of Financial Accounting.
Q: On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase…
A: Hedging is a process of managing risk involved in a transaction by purchasing or selling a financial…
Q: AU.S. company owns an 80. s interest in a company located on Mars, Martian currency is called the…
A: All foreign currency transaction should be recognize using the rate on the date of transaction,…
Q: The following information applies to Denton Incorporated’s sale of 10,000 foreign currency units…
A: Lets understand the basics. Management in order to hedge the currency risk, entered into forward…
Q: On September 22, Year 2, Yumi Corp. purchased merchandise from an unaffiliated foreign company for…
A: The objective of the question is to calculate the foreign currency transaction loss that Yumi Corp.…
On January 1, Narnevik Corporation formed a subsidiary in a foreign country. On April 1, the subsidiary purchased inventory on account at a cost of 250,000 local currency units (LCU). One-fifth of this inventory remained unsold on December 31, while 30 percent of the account payable had not yet been paid. The U.S. $ per LCU exchange rates were as follows:
At what amounts should the December 31 balances in inventory and accounts payable be translated into U.S. dollars using the current rate method?
![January 1..
April 1.....
Average for the current year..
December 31 ....
$0.60
0.58
0.54](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff33cdc86-d2b8-4d2d-a886-3b8b2279d98b%2F409d5933-253b-4e71-8156-39ea6caa8894%2F35h3iu.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- AU.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 20X2: Cost of goods sold Beginning inventory Ending inventory O $1,237,700 O $1,100,000 LCU 1,000,000 O $1,250,000 O $1,083,200 LCU 80,000 The average exchange rate during 20X2 was $1.10=LCU 1. The beginning inventory was acquired when the exchange rate was $1.00=LCU 1. Ending inventory was acquired when the exchange rate was $1.18=LCU 1. The exchange rate at December 31, 20X2, was $1.25 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary's cost of goods sold be reflected in the U.S. dollar income statement? LCU 110,000 ICOn October 1, 2024, Richmond Company sold inventory to a customer in a foreign country, denominated in 100,000 local currency units. Collection is expected in four months. On October 1, 2024, a forward exchange contract was acquired whereby Richmond was to pay 100,000 local currency units in four months (on February 1, 2025) and receive $86,000 in U.S. dollars. The spot and forward rates for the local currency units were as follows: Date Rate Description Exchange Rate October 1, 2024 Spot Rate $ 0.91 1 local currency unit December 31, 2024 Spot Rate $ 0.93 1 local currency unit February 1, 2025 1-Month Forward Rate Spot Rate $ 0.88 1 local currency unit $ 0.94 1 local currency unit Any discount or premium on the forward contract is amortized using the straight-line method. Required: Assuming this is a cash flow hedge, prepare journal entries for this sales transaction and forward contract.Turbo Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2017, for 100,000 markkas. It paid the foreign currency account payable on January 17, 2018. The following exchange rates for 1 markka are known:a. How does the fluctuation in exchange rates affect Turbo’s 2017 income statement?b. How does the fluctuation in exchange rates affect Turbo’s 2018 income statement?
- Clark Co., a U.S. corporation, sold inventory on December 1, 2021, with payment of 12,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: Spot rate: $1.831 Dec. 31 Spot rate: $1.976 Jan. 30 Spot rate: $1.768 Dec. 1 For what amount should Sales be credited on December 1? Multiple Choice $21,216. $21,972. $23,712. $19,760. $18,310.Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated in Mexican pesos in 2020: Bought inventory costing 116,000 pesos on credit. March 1 May 1 August 1 September 1 Sold 60 percent of the inventory for 96,000 pesos on credit. Collected 78,000 pesos from customers. Paid 68,000 pesos to suppliers. Currency exchange rates for 1 peso for 2020 are as follows: Date March 1 May 1 August 1 September 1 December 31 Assume that all receipts were converted into dollars as soon as they were received. For each of the following accounts, what amount will Voltac report on its 2020 financial statements? a b C d Inventory Cost of goods sold Sales Accounts receivable U.S. Dollar per Peso $ 0.25 0.26 0.27 0.28 0.29 e Accounts payable f CashOn August 1, Ling-Harvey Corporation (a U.S.-based importer) placed an order to purchase merchandise from a foreign supplier at a price of 400,000 ringgits. Ling-Harvey will receive and make payment for the merchandise in three months on October 31. On August 1, Ling-Harvey entered into a forward contract to purchase 400,000 ringgits in three months at a forward rate of $0.60. It properly designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate. Relevant exchange rates for the ringgit are as follows:Ling-Harvey’s incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901. Ling-Harvey must close its books and prepare its third-quarter financial statements on September 30.a. Prepare journal entries for the forward contract and firm commitment through October 31.b.…
- 3. On October 1, IJR International received an order from a Japanese customer for 2,500,000 Yen to be paid upon receipt of the goods, scheduled for December 1. The rates for $1 US are as follows: Spot rate, October 1 Forward rate, December 1 Spot rate, December 1 Exchange Rates for $1 for Yen 83 82 81 (a) Calculate what IJR would receive from the Japanese customer in US dollars using the spot rate at the time of the order. (b) Calculate what IJR would receive from the Japanese customer in US dollars using the spot rate at the time of payment. (c) Calculate the amount that IJR expects to receive on December 1 if IJR's policy is to hedge foreign currency transactions. (d) How can IJR protect itself from the risk of the transaction?The following balance sheet accounts of a foreign subsidiary at December 31, 2017, have been translated into U.S. dollars as follows: Translated at Current Rates Historical Rates Accounts receivable, current $ 600,000 $ 600,000 Accounts receivable, long-term 300,000 324,000 Inventories carried at market 180,000 198,000 Goodwill 190,000 220,000 $1,270,000 $ 1,402,000 What total should be included in the translated balance sheet at December 31, 2017, for the above items? Assume the U.S. dollar is the functional currency. $1,354,000 $1,270,000 $1,288,000 $1,300,000On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.
- Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2020, for 100,000 crowns. It paid the foreign currency account payable on January 15, 2021. The following exchange rates are relevant: Date U.S. Dollar per Crown November 1, 2020 $ 0.754 December 31, 2020 $ 0.742 January 15, 2021 $ 0.747 How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income statement? How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2021 income statement?A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024: Cost of goods sold Beginning inventory Ending inventory LCU 5,230,000 536,000 622,000 The average exchange rate during 2024 was $1.30 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.10 = LCU 1. Ending inventory was acquired when the exchange rate was $1.40 LCU 1. The exchange rate on December 31, 2024, was $1.45 = LCU 1. Required: Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement. Cost of goods soldOn January 1, 2024, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Cash and Receivables Net Property, Plant, and Equipment 40,000 37,000 60,000 92,000 30,000 32,000 20,000 20,000 10,000 40,000 60,000 92,000 Totals Accounts and Notes Payable Common Stock Retained Earnings Totals GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Jan. 1 Dec. 31 20,000 55,000 Revenues 75,000 Operating…
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)