On December 1, 2020, Beta Company, a U.S. electronics company purchased equipment from a Brazilan company for 900,000 Brazilian Real. The account is to be settiec January 31, 2021. To hedge against fluctuations in the exchange rate, On December 1, 2020 Beta Company entered into a forward contract to buy the 900,000 Brazilan Rea January 31, 2021 for $0.5453 Beta Comoany's year-end is December31 and Soot rates and the forward.rates for the Brazilan Beal wernas follows Spot Rate Forward Rate (Delivery on January 31, 2021) December 1, 2020 05451 $0.5425 $0.5453 $0.5426 December 31, 2020 Jaruary 312021 S0.5395 Required: Prepare the journal entries to record the transactions, adjust the accounts en December 31, 2020 and settle the payable and forward contract on January 31,2021.
Q: The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a…
A: Only the variable costs is relevant to the decision as it varies with production .Fixed cost on the…
Q: 21. if the direct method of allocation is used, how much of the equipment maintenance costs would be…
A: The overhead rate is calculated with the help of following formula Overhead Rate = Manufacturing…
Q: The Operations Division of the NDC plc is evaluating several investment projects. The ENPV method…
A: Residual Income: It is the net income after deducting charges for common shareholders'…
Q: Company A sells three products: B, C, and D. Budgeted information for the upcoming accounting…
A: The weighted average contribution margin is the overall contribution margin of all products.
Q: Another team member who is preparing the Budgeted Balance Sheet for the business for the same…
A: Trade Receivable Trade Receivable is an important part in the liquidity of the business entity which…
Q: What is the 2015 cash flow to stockholders? If net fixed assets
A: Cash flow analysis shows the financial condition of the company It is divided into three activity…
Q: pany leased a new machine from Keriboomboom Company on January 1, 2016, under a lease with the…
A: Solution:- As per FASB and GAAP, a lease is classified as capital lease if any of the following four…
Q: 6. The annual premium on an insurance policy is $1, 200. First, find the premium per period if…
A: Insurance is an agreement or arrangement between two parties where one party agrees to pay the…
Q: On November 2, 201*, Sade entered into firm commitment with Singaporean firm to acquire an…
A: On the Date of December the rate is 38 in Future Market i.e. Forward rate And the Spot rate is 36 So…
Q: 9. A firm had owner's capital of P150,000 in 2013 and P187,500 in 2013. The increase in owner's…
A: Increase in owner's capital = P187,500 - P150,000 = P37,500
Q: Mr. Ramos savings allow her to withdraw 50,000 semi-annually for 11 years starting at the end of 5…
A: Solution Concept This is the problem related to time value of money Present value is calculated by…
Q: ABC corporation incurred fixed manufacturing costs of $17,000 during 2017. Other information for…
A: Absorption costing is a method of aggregating and allocating manufacturing process expenses to…
Q: Yale Corporation issued to Zap Corporation $84,000, 8% (cash interest payable semiannually on June…
A: Journal entries serve as the foundation for various accounting operations such as ledger account…
Q: P10-1C: MULTIPLE CHOICE - PROBLEMS 1. During the year ELLE Company purchased P400,000 of inventory.…
A: Inventory Turnover Ratio is calculated by dividing Cost of Goods Sold by Average Inventory It is…
Q: Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data…
A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…
Q: From the following details, calculate interest coverage ratio: Net Profit after tax $ 60,000; IS%…
A: The interest coverage ratio is calculating as EBIT divided by interest expense.
Q: product AB makes sense. If the column nt and so are the columns of B.
A: To show that the given statement is False as,
Q: This depreciation method assumes that the annual cost of depreciation is a fixed percentage of the…
A: Depreciation means the amount of expenses due to usage of fixed assets due to normal wear and tear…
Q: Roy's Toys is a manufacturer of toys and other children's products. The following are selected items…
A: The practice of scrutinizing and comparing financial data of a corporation using its financial…
Q: Please can you provide some guidance on the deprciation calcuation?
A: Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of the…
Q: C4 Company owns 8% of Isolate Inc., P100 par, 140,000 outstanding ordinary shares which was acquired…
A: Equity investment which are designated as fair value through profit or loss are recorded initially…
Q: True or False 1. Intangible-purchase goals pertain to abstract goals such as happiness, long life,…
A: The answer is stated below:
Q: Discuss the effect of the misstatement identified on the audit opinion.
A: Introduction: A misstatement is the variation between the necessary quantity, classification,…
Q: The Polaris Company uses a job-order costing system. The following transactions occurred in October:…
A: The work in process account records the direct costs incurred in the production and manufacturing…
Q: (b) Assume the division is an investment center, and average operating assets were $1,000,000, The…
A: Return on investment (ROI) is used to determine the efficiency of investment by measuring the…
Q: Which of the following is part of risk assessment? A foreign subsidiary does not adapt to changes in…
A: Risk assessment refers to the practice of reviewing the activities as well as investments of the…
Q: Winnie and Minnie form a partnership. Winnie contributed $5,000 cash and $20,000 in inventory.…
A: Partnership means where two or more partners agree to do the business jointly and share profit and…
Q: During the current year, Bashful Company incurred the following costs to develop and produce a…
A: Cost: Cost is explained as the amount or something that is being incurred in monetary terms by an…
Q: 1) prepare a multi- step income statement. 2) prepare statement of Owners Equity
A: Introduction: Operating expenses and operating revenues are separated from non-operating expenses…
Q: Ryan is single and 50 year old. of the account before the distribution was $40,000. He distributed…
A: Here asked for multi question we will solve for first three sub part question for you. If you need…
Q: Project Size of Project Project IRR Project V P1.0 million 12.0% Project W 1.2 million 11.5 Project…
A: The plow back ratio is a fundamental analysis metric that determines how much profit is kept after…
Q: Morganton Company makes one product and it provided the following information to help prepere the…
A: A production budget is prepared to assess the number of units to be produced during a specific…
Q: %24 %24 3. Create Adjusting Journal Entry. a. Select Create (+) icon > Journal Entry b. Enter the…
A: Unearned Revenue: Unearned revenue is money received by a person or firm for a service or product…
Q: s of P2,000,000 are due on December 31, 2019. The lea
A: To find the balance of assets in Dec 31, 2022 as,
Q: n October 1, 2021, A Corp. purchased goods from US based corporation worth 60,500 US dollars.…
A: Solution Concept in respect of the monetary assets and liabilities , there shall be initial and…
Q: the taxpayer withheld 5% creditable withholding tax on rental payments to various VAT-registered…
A: Rent expense: Rent expense is an expense account that keeps an update of the cost of renting a…
Q: Dunk Company adopted the dollar-value LIFO inventory method on 12/31/2020 and uses one inventory…
A: The following are the answers: 1. The price index for 2021 is \$4.25. 2. The ending inventory for…
Q: on april 1, 2021, nels ferrer organized a business called friendly trucking. during april, the…
A: Journal entries recording is the first step of accounting process, under which one account is…
Q: What is the weighted average number of ordinary shares outstanding?
A: Calculation of weighted average number of ordinary shares outstanding: Date Particulars Share…
Q: Yanie's coffee beans store had accounts receivable of $18,000 at the beginning of the year and…
A: Cash received from customers = Beginning balance of Accounts Receivable + Credit sales during the…
Q: 3. On December 31, 2020, GHI Corporation holds 50,000 shares of Harry Company with market value of…
A: the answer is 112,000 Credit. we will transfer 112,000 gain from the unrealized gain or loss to the…
Q: On January 1, 2022, Edward Corporation (lessor) enters into a ten-year lease of equipment to Kirk…
A: In lease accounting, interest income that is to be recognized by lessor in its financial statement =…
Q: reported the following information wi Roundt espect to cost of goods sold for the current year:…
A: 1.Inventories shall be measured at the lower of cost and net realizable value on balance sheet date…
Q: bought shares of Crossing, Inc. in two batches as follows: June 10, 2021 - 2,000 shares at P100…
A: Gain on sale of shares on December 10: P47,500 A per IFRS 9 , when the financial instrument is…
Q: ousins Rohit and Shymal for several years in a business consulting firm. With the intense level of…
A: The answer has been mentioned below.
Q: The Rollins Company has office employees and shipping employees. A summary of their earnings and…
A: Journal entry is the primary step to record the transaction in the books of accounts. The debit and…
Q: Significant deficiencies in internal control are required to be reported a. Management of the unit…
A: A deficiency in internal control exists when the design or operation of a control does not allow…
Q: 9. Oaks Company maintains a cafeteria for its employees. For June, variable food costs were budgeted…
A: Performance review is the process of determining how well an individual executes certain duties. It…
Q: 20. Chan transfers property with an adjusted basis of $65,000 and an FMV of S70,000 to Wallis…
A: The spending required to generate and sell products and services, or to acquire assets, is referred…
Q: Which of the following statements is most correct? Group of answer choices A debenture is a secured…
A: Debenture are long term debt instrument issued by the company to raise funds. The explanation is…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- On November 1, 2020, Ocean Grove, Inc., a U.S. company, purchased from Monterrey Corporation, a Mexican company, some machinery that cost 1,000,000 pesos (the machinery was delivered on November 1, so this is the "existing payable" scenario). The invoice was payable in pesos on February 1, 2021. To hedge against any potential changes in the exchange rate, Ocean Grove entered into a forward contract on November 1, 2020 with Bradley Beach Trader. a US brokerage and investment firm. The contract specified that Ocean Grove would buy 1,000,000 pesos from Bradley Beach for settlement on February 1, 2021. Assume the company uses the gross method. Relevant exchange rates are below: 11/1/20 12/31/20 2/1/21 Spot $0.042 $0.043 $0.040 rate Forward rate for 2/1/21 $0.045 $0.047 When Ocean Grove records the forward contract with Brady Beach Trader on November 1, which side will be denominated in pesOs, and for how much? Contract Payable for $42,000 Contract Receivable for $42,000 Contract Receivable…On May 8, 2019, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The terms of the sale required Lopez to pay 800,000 pesos on February 10, 2020. Jett prepares quarterly financial statements on March 31, June 30, September 30, and December 31. The exchange rates for pesos during the time the receivable is outstanding follow. Compute the foreign exchange gain or loss that Jett should report on each of its quarterly income statements for the last three quarters of 2019 and the first quarter of 2020. Also compute the amount reported on Jett’s balance sheets at the end of each of its last three quarters of 2019. May 8, 2019 . $0.1323 June 30, 2019 . 0.1352 September 30, 2019 . 0.1368 December 31, 2019 0.1335 February 10, 2020 . 0.1386On 1 November 2022, Long Ltd enters a contract to buy inventory from an overseas supplier, with the inventory to be delivered in six months' time. A sum of US$1 000000 is payable on delivery of the inventory. Long Ltd does not want to be exposed to potential losses associated with changes in the exchange rate. As a result, Long Ltd takes out a forward rate contract with Board Bank to purchase US$1 000000 in six months' time at an exchange rate of A$1.00 = US$0.70. REQUIRED Explain who now bears the risks associated with changes in the exchange rate, and calculate how much Long Ltd will ultimately pay for the invento
- Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied: Date Spot Rate December 16, 2021 $0.00082 December 31, 2021 0.00080 January 15, 2022 0.00086 Assuming a forward contract was entered into on December 16, how would the forward contract be reflected on Jackson's December 31, 2021 balance sheet? Multiple Choice Forward contract (asset). Forward contract (lability) Forward Rate to Jan. 15 $0.00089 0.00083 0.00086 Foreign currency (asset) SubnOn 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 GAZAIcebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 16,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 16,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $ 3.40 $ 3.475 December 31, 2020 3.50 3.600 March 1, 2021 3.65 N/A Icebreaker must close its books and prepare financial statements at December 31. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. a-2. What is the impact on…
- Maplewood Inc. sells lumber to a number of clients around the world. On December 1, 2020 the company shipped some lumber to a client in the U.S. The selling price was established at US$600,000 with payment to be received on March 1, 2021. On December 3, 2020 Maplewood Inc. entered into a hedge by way of a forward contract with a Canadian Bank at the 90-day forward rate of US$1 = CDN$1.275. Hedge accounting is not applied. Maplewood Inc. received the payment from its American client on March 1, 2021. The company's year-end is on December 31. The two-month forward rate for US dollars was CDN$1.255 on that date. Selected spot rates were as follows: December 1, 2020: US$1 = CDN$1.2355 December 3, 2020: US$1 = CDN$1.2355 December 31, 2020: US$1 = CDN$1.2455 March 1, 2021: US$1 = CDN$1.2480 Required: Part a) Prepare a partial Balance Sheet for Maplewood Inc. on December 31, 2020. Part b) Prepare the journal entries on March 1, 2021.On December 2, 2020, Troll Company, a U.S. company, sold machinery to Amigo, a Mexican company, with payment due on March 4, 2021. If Troll's fiscal year-end is December 31 and its 2020 income from continuing operations does not include any foreign currency exchange gain or loss, it is most likely that: O A. Troll entered into a forward contract to purchase Mexican peso on March 4, 2021. O B. this transaction caused a foreign currency translation gain or loss to be adjusted to the accounts receivable (Mex$). O C. this sale was denominated in U.S. dollars. O D. this transaction resulted in a foreign currency transaction gain or loss to be included in other comprehensive income.On September 1, 2019 Philips corporation sold merchandise to a foreign customer for 300,000 Brazilian real with payment to be received on March 1, 2020. At the date of sale, Philips entered into a six month forward contract to sell 300,000 reals. The forward contract was properly designated as a fair value hedge. The following exchange rates apply: Date Spot rate Forward rate (to March 1, 2020) September 1, 2019 $0.46 $ 0.49 December 31, 2019 0.50 0.52 March 1, 2020 0.54 Philips’ incremental borrowing rate is 12%. The present value factor at an annual interest rate of 12% is .9610. What journal entry should Philips prepare to record the value of the forward contract on December…
- Dell Bhd bought a plant from an Australian company for AUD350,000 on 1 April 2021 when the exchange rate was RM1:AUD 0.3344. Dell Bhd paid AUD100,000 on 1 June 2021 when the exchange rate was RM1:AUD0.3322. The balance was due on 1 June 2022. The exchange rate on 31 December 2021 was RM1:AUD0.3257. The estimated life of the plant was 5 years. Dell Bhd adopts the cost model and uses straight line method for depreciation of its property, plant and equipment based on a monthly basis. The functional currency of Dell Bhd is RM. Required: Show the extracts of the Statement of Profit or Loss for the year ended 31 December 2021 and the Statement of Financial Position as at that date for Dell Bhd to show the effects of the above transactions.Icebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 14,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 14,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $3.20 $ 3.275 December 31, 2020 3.30 3.400 March 1, 2021 3.45 N/A Icebreaker must close its books and prepare financial statements at December 31. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2020 net income? a-3.…On November 1, 2020, Joey Company contracts to purchase special order goods from New York company. Their manufacture and delivery will take place in 120 days (on March 1, 2021 ). The contract price is $1,200, to be paid by August 1, 2020 which is 150 days after delivery. On November 1, 2020, Joey hedges its foreign currency payable commitment with a forward exchange contract – fair value hedge to receive $1,200 in 270 days (the 120 days delivery plus 150 days of credit period). The forward rate for a 270-day forward contract is P41.25 to 1$. The purpose of this 270-day forward exchange contract is two-fold. First, for the 120 days from November 1, 2020 until March 1, 2021, the forward exchange contract is a hedge of an identifiable foreign currency firm commitment. For the 150-day period from March 1, 2021 until August 1, 2021, the forward exchange contract is a hedge of a foreign currency exposed net liability position. The following exchange rates at various dates are as follows…