Question 2: A manufacturing entity buys a machine (an item of property, plant and equipment) for 20 million dinars on 1 January 20X1. The machine is held under the cost model and has a useful life of 20 years. The entity has a reporting date of 31 December 20X1 and a functional currency of dollars ($). Exchange rates are as follows: Dinars: $1 1 January 20X1 2.0 31 December 20X1 3.0 Average rate for year-ended 31 December 20X1 2.5 What is the carrving amount of the machine as at 31 December 20X1?

Question 2: A manufacturing entity buys a machine (an item of property, plant and equipment) for 20 million dinars on 1 January 20X1. The machine is held under the cost model and has a useful life of 20 years. The entity has a reporting date of 31 December 20X1 and a functional currency of dollars ($). Exchange rates are as follows: Dinars: $1 1 January 20X1 2.0 31 December 20X1 3.0 Average rate for year-ended 31 December 20X1 2.5 What is the carrving amount of the machine as at 31 December 20X1?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter8: Revenue Recognition, Receivables, And Advances From Customers

Section: Chapter Questions

Problem 47P

See similar textbooks

Similar questions

(a) ABC Co has a year end of 31 December 20X1 and uses the dollar ($) as its functional currency. On 25 October 20X1 ABC Co buys goods from a Swedish supplier for Swedish Krona (SWK) 286,000. Rates of exchange: 25 October 20X1 $1 = SWK 11.16 16 November 20X1 $1 = SWK 10.87 31 December 20X1 $1 = SWK 11.02 Required: Show the accounting treatment for the above transactions if: (a) A payment of SWK286,000 is made on 16 November 20X1. (b) The amount owed remains outstanding at the year-end date.
Chapter 2/Question 3: Sunshine is an entity with a reporting date of 31 December 20X1 and a functional currency of dollars ($). On 30 June 20X1, it purchased land from overseas at a cost of 30 million dinars. The land is an item of property, plant and equipment and is measured using the cost model. Exchange rates are as follows: The fair value of the land at 31 December 20X1 was 32 million dinars. What is the carrying amount of the land as at 31 December 20X1?
Amazing Corporation, a U.S. enterprise, sold product to a customer in Wales on October 1, 20x1 for £200,000 with payment required on April 1, 20x2. Relevant exchange rates are: October 1, 20x1 April 1, 20x2 Spot rate December 31, 20x1 1.86 $1.87 O Liability $1,880 O Asset $1,880 O Asset $3,880 O Liability $3,880 1.90 Forward rate (to 4/1/x2) $1.85 $1.84 The discount factor corresponding to the company's incremental borrowing rate for 3 months is 0.94. Assume that Amazing Corporation enters a forward contract on October 1, 20x1 to sell £200,000 six months hence, on April 1, 20x2. How should Amazing Corporation report the forward contract on its December 31, 20x1 financial statements?
Question 8 On November 1, 20X6, Smith Imports Inc. contracted to purchase teacups from England for £30,000. The teacups were to be delivered on January 30, 20X7, with payment due on March 1, 20X7. On November 1, 20X6, Smith entered into a 120-day forward contract to receive 30,000 pounds at a forward rate of £1 = $1.59. The forward contract was acquired to hedge the financial component of the foreign currency commitment. Assume the company uses the forward rate in measuring the forward exchange contract and for measuring hedge effectiveness. Spot and exchange rates follow: Date Spot Rate Forward Ratefor March 1, 20X7 November 1, 20X6 £1 = $1.61 £1 = $1.59 December 31, 20X6 £1 = 1.65 £1 = 1.62 January 30, 20X7 £1 = 1.59 £1 = 1.60 March 1, 20X7 £1 = 1.585 wh Which of the following journal entries as of December 31, 20X6 would appropriately reflect the accounting for this hedge as a fair value hedge? Dr. Foreign Currency…
10. A company has entered into a cash-settled forward contract to sell 10m pounds at $1.5/pound. If the exchange rate at expiration is $1.75/pound, the company will: A. Make a payment of 2.5m dollars B. Receive a payment of 2.5 million pounds C. Make a payment of 10m pounds
Question 1 Agya Pa Limited received the rights to manufacture and market commemorative gold tokens for Asanteman PLC. Agya Pa agreed to pay Asanteman PLC GHC 2 per token sold, subject to a minimum annual payment of GHC 100,000. Any shortfall in the minimum annual payment is to be recovered within two years following the year in which it arises. During the first five years of the agreement, Agya Pa Limited's sales were as follows: Year to 31 December 2019 2020 2021 2022 2023 Number sold 30,000 40,000 60,000 70,000 45,000 The amount due to be paid to Asanteman PLC in respect of amounts owing as at 31 December was to be paid on 31 January in the following year. Required: Show the ledger entries to be recorded for the above transactions in Agya Pa Limited's books for the years 2019 to 2023.
Alpha Company, whose journal entry is in the dollar, purchased goods with an invoiced value of FC250,000 on 1 November 20x1 to be settled on 31 January 20x2. Alpha Company’s financial year end is 31 December. Exchange rates 1 November 20x1 1FC:$1.5 31 December 20x1 1FC:$1.45 31 January 20x2 1FC:$1.48 Prepare the journal entry for Alpha Company: (a)1 November 20x1-Purchase of goods: (b)31 December 20x1- Year-end adjustment for outstanding accounts payable: (c)31 January 20x2 – Settlement of accounts payable:
On Mei 31, 2016, PT Risa sold the item to PT Bulan (functional currency is US $) for of the total $ 30,000 invoice by November 31, 2018. The functional currency of PT Risa is IDR , and the effective date is December 31st. Exchange rate between $ and IDR: Mei 31, 2016 ($1) : Spot rate = IDR 15,575 US$1 , Forward rate (6 months) = IDR 15,375 November 31, 2016 ($1) : Spot rate = IDR 14,250 PT Risa completed the forex risk hedging transaction on November 31, 2016 by signing a forward contract to sell US $ for $ 30,000. PT Risa also chose to apply fair value hedging accounting in accordance with PSAK71. prepare journal entries recorded by PT Risa on Mei 31, 2016 and November 31, 2016. Please explain !
Journal entries for an account payable denominated in Mexican Pesos ($US weakens and strengthens) Assume that your company purchases inventories from a Mexican supplier on December 15. The invoice specifies that payment is to be made on March 15 in Mexican Pesos (Peso) in the amount of 350,000 Pesos. Your company operates on a calendar year basis. Assume the following exchange rates: December 15 $0.046:1 Peso December 31 $0.053:1 Peso March 15 $0.050:1 Peso Prepare the journal entries to record the purchase (assume perpetual inventory accounting), the required adjusting entry at December 31, and the payment on March 15. General Journal Date Description Debit Credit Accounts payable Accounts payable Dec 15 Inventory Dec 31 Foreign currency transaction loss Mar 15 Accounts payable ÷ 16,100 0 0 16,100 2,450 0 0 2,450 28,000 × 0 Foreign currency transaction gain 0 10,500 x Cash 0 17,500
On Oct 1, 2015, Short company ordered some equipment from a supplier for 200,000 euros. Delivery and payment will occur on Nov 30, 2016. The spot rates on Oct 1 and Nov 30 are $1.50 and $1.30 If the forward contract is acquired, what is the overall exchange gain or loss? a. $30,000 gain O b. $10,000 gain 50 O d. $10,000 loss
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.
8. Clark Stone purchases raw material from its foreign supplier, Rinne Clay, on May 8. Payment of 1,500,000 foreign currency units (FC) is due in 30 days. May 31 is Clark's fiscal year-end. The pertinent exchange rates were as follows: May 8 May 31 June 7 Spot rate: $1.16 Spot rate:$1.18 Spot rate: $1.12 For what amount should Clark's Accounts Payable be credited on May 8? a. $1,680,000. b. $1,850,000. c. $1,740,000. d. $1,500,000. e. $1,770,000. in he