Chap011_Classproblems_solu

Chap011_Classproblems_solu - Solutions to Chapter 11...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Solutions to Chapter 11 In‐class Problems 1 E11-11 Foreign Currency Transactions [AICPA Adapted] 1. d 20X1 20X2 $.4895 x DM30,000 $14,685 $.4845 x DM30,000 $14,535 $.4845 x DM30,000 14,535 $.4945 x DM30,000 14,835 Gain $ 150 Loss $ (300 ) 2. b January 15 Foreign Currency Units (LCU) 300,000 Exchange Loss 15,000 Accounts Receivable (LCU) 315,000 Collect foreign currency receivable and recognize foreign currency transaction loss for changes in exchange rates: $300,000 = (LCU 900,000 / LCU 3) Jan. 15 value - 315,000 = Dec. 31 U.S. dollar equivalent $ 15,000 Foreign currency transaction loss 3. d $120,000 = July 1, 20X1, U.S. dollar equivalent value $140,000 = December 31, 20X1, U.S. dollar equivalent value (LCU 840,000 / $140,000) = LCU 6 / $1 105,000 = July 1, 20X2, U.S. dollar equivalent value (LCU 840,000 / 8) = $105,000 $(35,000 ) Foreign currency transaction loss 4. c C$1 / $.90 (C$1.11 = $1.00) 5. d $280,000 = July 1, 20X5, U.S. dollar equivalent value -240,000 = December 31, 20X4, U.S. dollar equivalent value $ 40,000 Foreign currency transaction loss 6. d 7. d
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 P11-24 Foreign Purchases and Sales Transactions and Hedging Part I a. Journal entries for Maple's import and export transactions during 20X5 and 20X6: 1. March 1, 20X5 Accounts Receivable (C$) 19,500 Sales 19,500 $19,500 = C$30,000 x $.65 spot rate May 30, 20X5 Accounts Receivable (C$) 900 Foreign Currency Transaction Gain 900 $900 = C$30,000 x ($.68 - .65) Foreign Currency Units (C$) 20,400 Accounts Receivable (C$) 20,400 $20,400 = C$30,000 x $.68 Cash 20,400 Foreign Currency Units (C$) 20,400 2. July 1, 20X5 No entry is recorded when the contract to purchase equipment is signed. August 30, 20X5 Equipment 52,000 Accounts Payable (¥) 52,000 $52,000 = ¥500,000 x $.104 October 29, 20X5 Foreign Currency Transaction Loss 1,000 Accounts Payable (¥) 1,000 $1,000 = ¥500,000 x ($.106 - $.104) Foreign Currency Units (¥)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/01/2010 for the course MGMT 503 taught by Professor Staff during the Spring '08 term at Purdue.

Page1 / 8

Chap011_Classproblems_solu - Solutions to Chapter 11...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online