ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
12th Edition
ISBN: 9781260824292
Author: Christensen
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 11.7E
a.
To determine
Introduction: Foreign exchange rate is the rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate.
Direct exchange rate: It is the rate at which price of a unit of the foreign currency is expressed in the unit of local currency.
Indirect exchange rate: It is the rate at which price of a unit of the local currency is expressed in the unit of foreign currency.
The denomination of the currency of the transaction.
b.
To determine
Introduction: Foreign exchange rate is the rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate.
Direct exchange rate: It is the rate at which price of a unit of the foreign currency is expressed in the unit of local currency.
Indirect exchange rate: It is the rate at which price of a unit of the local currency is expressed in the unit of foreign currency.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please help me
Subject :- Accounting
On June 1, a calendar year U.S. manufacturer sells, on 60-day credit, goods to Oman importer for US$ 1,000,000. The Dollar/Rial exchange rate is OMR 1 = US$ 0.40 on June 1, and OMR 1 = $ 0.39 on August 1.
Required: Prepare dated journal entries in Oman Rials to record the incurrence and settlement of this foreign currency transaction assuming It employs a two-transaction perspective.
Chapter 11 Solutions
ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
Ch. 11 - Prob. 11.1QCh. 11 - Prob. 11.2QCh. 11 - The U.S. dollar strengthened against the European...Ch. 11 - Prob. 11.4QCh. 11 - Prob. 11.5QCh. 11 - How are assets and liabilities denominated in a...Ch. 11 - Prob. 11.7QCh. 11 - Prob. 11.8QCh. 11 - Prob. 11.9QCh. 11 - Distinguish between an exposed net asset position...
Ch. 11 - Prob. 11.11QCh. 11 - Prob. 11.12QCh. 11 - Effects of Changing Exchange Rates Analysis Since...Ch. 11 - Prob. 11.2CCh. 11 - Prob. 11.5CCh. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Basic Understanding of Foreign Exposure The...Ch. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Prob. 11.7ECh. 11 - Adjusting Entries for Foreign Currency Balances...Ch. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11.1ECh. 11 - Prob. 11.11.2ECh. 11 - Prob. 11.11.3ECh. 11 - Prob. 11.11.4ECh. 11 - Prob. 11.11.5ECh. 11 - Prob. 11.11.6ECh. 11 - Prob. 11.11.7ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14.1ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.3ECh. 11 - Prob. 11.14.4ECh. 11 - Prob. 11.14.5ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.7ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16AECh. 11 - Prob. 11.17ECh. 11 - Prob. 11.18ECh. 11 - Prob. 11.19.1ECh. 11 - Prob. 11.19.2ECh. 11 - Prob. 11.19.3ECh. 11 - Prob. 11.19.4ECh. 11 - Prob. 11.19.5ECh. 11 - Prob. 11.20.1PCh. 11 - Prob. 11.20.2PCh. 11 - Prob. 11.20.3PCh. 11 - Prob. 11.20.4PCh. 11 - Prob. 11.20.5PCh. 11 - Foreign Sales Tex Hardware sells many of its...Ch. 11 - Prob. 11.22PCh. 11 - Prob. 11.23.1PCh. 11 - Prob. 11.23.2PCh. 11 - Prob. 11.24PCh. 11 - Prob. 11.25PCh. 11 - Prob. 11.26PCh. 11 - Prob. 11.27.1PCh. 11 - Prob. 11.27.2PCh. 11 - Prob. 11.27.3PCh. 11 - Prob. 11.28APCh. 11 - Prob. 11.29.1BPCh. 11 - Prob. 11.29.2BPCh. 11 - Prob. 11.29.3BPCh. 11 - Prob. 11.29.4BPCh. 11 - Prob. 11.29.5BPCh. 11 - Prob. 11.29.6BPCh. 11 - Prob. 11.30BPCh. 11 - Prob. 11.31BPCh. 11 - Matching Key Terms Match the items in the lefthand...
Knowledge Booster
Similar questions
- Problem 2: Old Colonial Corp. (a U.S. company) made a sale to a foreign customer on September 15, 2018, for 100,000 stickles. Payment was received on October 15, 2018. The following exchange rates applied: Date Rate Date Rate Date Rate Sept. 15, 2018 51-5.48 Sept 30, 2018 51-5.50 Oct. 15, 2018 51-5.44 Required: Prepare all journal entries for Old Colonial Corp. in connection with this sale assuming that the company closes its books on September 30 to prepare interim financial statements.arrow_forwardJournal entries for an accounts receivable denominated in Swiss Francs ($US strengthens and weakens) Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09.1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Description Date 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable Debit + ✓ 250,000 x + ✓ ✓ # ✓ 0✓ 10,000 x 0✓ ÷ ✓ 277,500✔ ooo 4 x 0✔ 0✓ Credit 0✓ 250,000 x 0✓ 10,000 x 277,500 x 0xarrow_forwardJournal entries for an accounts receivable denominated in Swiss Francs ($US strengthens and weakens) Assume that your company sells products to a customer located in Switzerland on November 20. The invoice specifies that payment is to be made on February 20 in Swiss Francs (CHF) in the amount of CHF 250,000. Your company operates on a calendar year basis. Assume the following exchange rates: November 20 $1.12:1CHF December 31 $1.09:1CHF February 20 $1.11:1CHF Prepare the journal entries to record the sale (ignore cost of goods sold), the required adjusting entry at December 31, and the receipt of payment February 20. Date Description Credit 11/20 Accounts receivable Sales 12/31 Foreign currency transaction loss Accounts receivable 2/20 Cash Accounts receivable Accounts receivable → ✓ ✓ ✓ + → ✔ ✓ → Debit 250,000 x 0 ✓ 10,000 * 0✔ 277,500✔ 0✓ 0✔ 0✔ 250,000 * 0✔ 10,000 x 0 ✓ 277,500 * 0 xarrow_forward
- Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 100,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply:Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements.arrow_forwardPeerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 118,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: September 15 $ .60 September 30 .66 October 15 .61 Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements. (If no entry is required for a transaction/event, select " No journal entry required" in the first account field.) 1 Record the entry for sales on credit. 2 Record the entry for changes in the exchange rate. 3 Record the entry for changes in the exchange rate. 4 Record the entry for receipt of payment.arrow_forward8. Assume that your company purchases inventories from a supplier on December 15. The invoice specifies that payment is to be made on March 15 in Euros in the amount of 10,000 Euros. Your company operates on a calendar year basis. Assume the following exchange rates and the company does not enter into any hedging arrangements: December 15 $1.35 :1 Euro December 31 $1.37 :1 Euro March 15 $1.38 :1 Euro Requirement: Prepare the journal entry that needs to be made on March 15arrow_forward
- Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 121,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: September 15 $ 0.60 September 30 0.66 October 15 0.61 Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements. (If no entry is required for a transaction/event, select " No journal entry required" in the first account field.)arrow_forwardPeerless Corporation (a U.S.-based company) made a sale to a foreign customer on September 15, for 104,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: Date September 15 September 30 October 15 U.S. Dollar per Crown $ 0.61 0.65 0.61 Required: Prepare all journal entries for Peerless Corporation in connection with this export sale, assuming that the company closes its books on September 30 to prepare interim financial statements. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.arrow_forward1 . PL Co purchased goods on credit from a US supplier costing $US 225,000 on 5th June 2020 when the exchange rate was A$1 = US0.69 . On 30 June 2020, balance date , the exchange rate was A$1 = US0.72 . PL Co paid the US supplier on 7th July 2020 when the exchange rate was A$1 = 0.74. Required : Prepare the journal entries for the abovearrow_forward
- Peerless Corporation (a U.S.-based company) made a sale to a foreign customer on September 15, for 107,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: Date U. 5. Dollar per Crown September 15.5 0.60 September 30 0.66 October 15.0.61 Prepare all journal entries for Peerless Corporation in connection with this export sale, assuming that the company closes its books on September 30 to prepare interim financial statementsarrow_forwardOn November 30, P Corporation purchased inventory from a Chinese supplier. The Chinese company requires payment to be made in Yuan. What exchange rate should be used to value the account payable on the balance sheet? a_ Weighted average exchange rate for the year. B) Exchange rate at the end of the year C) Exchange rate on the settlement date D) Exchange rate on the date of purchase.arrow_forwardOn September 1, 2020, Creed Co. sold merchandise to a foreign entity for 250,000 francs. Terms of the sale require payment in francs on February 1, 2021. On September 1, 2020, the spot exchange rate was P1.2 per franc. On December 31, 2020, the spot rate was P1.19, but the rate increased to P1.22 by February 1, 2021, when payment was received. Required: Provide journal entries in 2020 and 2021.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education