Use the following information on the U.S. dollar value of the euro to answer the question.Forward Rate forSpot Rate April 30, 2024 Delivery$1.130$1,140October 20, 2023November 1, 2023December 31, 2023April 30, 2024Select one:1.1481.1001.170On October 30, 2023, a US company receives a purchase order from a customer in Spain. Under the sale terms, the customer will pay the company €100.000 on April 30; 2024 On October 30, theUS company also enters a forward contract to sell €100,000 on April 30, 2024. The company delivers the merchandise to the customer on November 1, On April 30, the company receives €100,000from the customer and sells it using the forward contract. The company's accounting year ends December 31.What net gain or loss is recognized in 2023, in addition to sales revenue?esca $500 net lossb. 1800 net gain,c. $800 net lossd. $500 net gain3.14511651.170*8:MacBook Air&FL40#6-4116W19FMm

Answered: October 30, 2023 November 1, 2023…

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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On January 31, 2019 the exchange rate between the US dollar and the euro was 1.14 USD/EUR. At the end of 2014, it was at 1.23 USD/EUR. a) Calculate the percentage change in the exchange rate. b) A shirt costs USD 40 in the US. How high can the price in Germany be, so that it is worth buying the shirt in Germany?
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On December 1, 2022, GAZA Company purchased Equipment from Ispanya by 100,000 Euro payable on March 31, 2023. At the same time GAZA entered into a 120-day forward contract with :ALQUDS Bank to purchase 100,000 Euro in March 31, 2023 to hedge risk of changes in exchange rates. GAZA's fiscal year ends on December 31. The direct exchange rates follow Date Spot Rate Forward Rate December 1, 20X1 December 31, 20X1 0.600 0.610 0.609 0.612 March 31, 20X2 0.602 Required: Prepare all journal entries for GAZA
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KA. On July 1, 2019, Great White North (GWN) Inc. purchased merchandise from a supplier in the U.S. for US$800,000 with terms requiring full payment by October 31, 2019. GWN has a July 31st year end. On October 31, 2019, GWN paid its supplier in full. Selected dates and spot rates are shown below: July 1, 2019 CDN $1.2150 July 31, 2019 CDN $1.2175 October 31, 2019 CDN $1.22 1) Prepare all journal entries on Settlement date. 2) Prepare all journal entries that would be prepared at year end.
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Southerland Corporation, a U.S. video games manufacturer, had several foreign exchange transactions during 2023 and 2024. 2023 10/01/23 11/01/23 12/31/23 2024 01/31/24 Required: Southlerland sold office equipment to a firm in Oman for 100,000 rial. Payment is to be received in Omani rial in six months on April 1, 2024. The spot rate for the Omani rial dinar is $2.65. Contracted to deliver inventory to a firm in Poland on January 31, 2024. The contract was for 725,000 Polish zloty due on May 1, 2024. To hedge against the future commit- ment, Southerland acquired a forward exchange contract. The six-month contract is to sell 725,000 Polish zloty to the broker on June 4, 2024 at a forward rate of $0.20. The spot rate on for the Polish zloty on November 1, 2023 is $0.25. Adjusted the accounts when the spot/current rate and forward rate for the Polish zloty is $0.18 and $0.21, respectively, and the current rate for the Omani rial is $2.66. Delivered inventory to the firm in Poland.…
On January 5, 2019, our company receives a nonbinding purchase order for sale of merchandise to a customer in Slovakia, with delivery of the merchandise scheduled for June 30, 2019. The customer preliminarily agreed to pay €650,000 for the merchandise, and payment is due from the customer upon delivery. On January 5, 2019, our company also purchases an option that gives our company the right to sell (i.e., put) €650,000 on any date until June 30, 2019 (i.e., it is an “American-style” option) for $1.28:€1 (i.e., the spot rate on January 5, 2019). On January 5, 2019, the fair value of the option (i.e., the option premium) is $19,500. In addition, our company elected to immediately include in the determination of net income all of the change in option value attributable to factors excluded from the assessment of hedge effectiveness (i.e., the non-intrinsic-value components, like time value). The relevant exchange rates and related balances for the period from January 5, 2019, to June 30,…
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