Nance Company sold inventory on October 1, 2020 to a foreign customer for 850,000 units of foreign curency (FC) due on January 31, 2021. Simultaneously, Nance entered into a forward contract to sell 850,000 units of FC on January 31, 2021 at the forward rate of $.76. Payment was received from the foreign customer on January 31, 2021. Nance company ends its flacal year on December 31. The following exchange raten were quoted: Forward Rate Date Spot Rate(Delvery on.1/312021) 10/1/2020 0.72 0.76 12/31/20200.73 0.70 1/31/2021 0.70 (Reminder: To avoid confusion as explained in class, only use the following accounts to make jounal entries for foreign curency transactions Inventory, Sales, Cash, Machine, Equipment, APayable (FC), AMReceivable (FC), Exchange , Fwd Contract, Contract GA, Contract GL- OCI, Firm Commitment, Commitment , Option, Option G, Option G/LOČI) Required: A. Prepare all journal entries relative to the above event by Nance on October 1, 2020. BuyBel Account Dr. Account Cr. B. Prepare all joumal entries relative to the above event by Nance on December 31, 2020. Buy/Sell Account

Nance Company sold inventory on October 1, 2020 to a foreign customer for 850,000 units of foreign curency (FC) due on January 31, 2021. Simultaneously, Nance entered into a forward contract to sell 850,000 units of FC on January 31, 2021 at the forward rate of $.76. Payment was received from the foreign customer on January 31, 2021. Nance company ends its flacal year on December 31. The following exchange raten were quoted: Forward Rate Date Spot Rate(Delvery on.1/312021) 10/1/2020 0.72 0.76 12/31/20200.73 0.70 1/31/2021 0.70 (Reminder: To avoid confusion as explained in class, only use the following accounts to make jounal entries for foreign curency transactions Inventory, Sales, Cash, Machine, Equipment, APayable (FC), AMReceivable (FC), Exchange , Fwd Contract, Contract GA, Contract GL- OCI, Firm Commitment, Commitment , Option, Option G, Option G/LOČI) Required: A. Prepare all journal entries relative to the above event by Nance on October 1, 2020. BuyBel Account Dr. Account Cr. B. Prepare all joumal entries relative to the above event by Nance on December 31, 2020. Buy/Sell Account

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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