ACCT 559 Week_6_Homework.xlsx - Problem 9-29 There is no...

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Problem 9-29 a. b. c. On March 1, 2016, $72,000 - $76,800 = -$4,800. There is a foreign exchange gain of $4,800 reported in 2016. There is no publisher template for this assignment since much of it is done in explanation form, I have listed the 3 sections you can respond there with your answer to each: Benjamin has a liability of AL160,000 (=20,000 widgets x AL8) on December 1, 2015. Translate this into dollars: $70,400 (= x $0.44). At year end, the liability is $76,800 (AL 160,000 x $0.48) in US dollars. $76,800-$70,400 = $6,400. There should b increase in the value of liability at the end of the year resulting in a foreign exchange loss amounting $6,400. This amount s reported in the year 2015. On the date of the payment of the loan Mar 1, 2016, the dollar value has come down to $72,000 x $0.45) resulting in a foreign exchange gain of $4,800 ($72,000 - $76,800), which should be reported in 2016. On Sept 1, 2015, the liability was $73,600 (AL160,000 x $0.46). On Dec 1, 2015, it was $70,400. $70,400 - $73,600 = -$3,2 decline in the dollar value of the liability creates a foreign excange gain of $3,200 in 2015. $76,800 - $73,600 = $3,200. An increase in the dollar value of the liability at the end of the year resulted a foreign exchange amounting to $3,200, which should be reported in 2015.
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