foreign-transactions-problems

foreign-transactions-problems - FOREIGN CURRENCY...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
FOREIGN CURRENCY TRANSACTIONS XADVAC3 Importing Transaction (Exposed Liability) Problem 1. Assume that on November 1, 2014 ALDUB COMPANY ordered 1,200 units of inventory from U.S firm for $24,000. The inventory was shipped and invoiced to the ALDUB on December 01, 2014 to be paid on March 01, 2015. The firm’s fiscal year-end is December 31. Assume further that the Philippine firm did not engage in any form of hedging activity. The spot rates for at various times are as follow: Buying Spot Rates Selling Spot Rates November 01, 2014 P 39.80 P 40.25 December 01, 2014 40.00 40.55 December 31, 2014 40.70 40.80 March 01, 2015 40.60 40.65 Required: Prepare all entries on ALDUB COMPANY’s books to record the above transactions Determined the following: 1. Foreign Exchange Gain or Loss on: a. Transaction Date ( December 01, 2014) b. Balance Sheet Date ( December 31, 2014) c. Settlement Date ( March 01, 2015) 2. On December 31, 2014, the value of a. Accounts Payable b. Inventory Exporting Transaction (Exposed Asset) Problem 2. On November 01, 2014, A Philippine firm received an order for 120 units of inventory for $60,000 to a U.S. The Philippine firm shipped the inventory and billed the
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern