Problem-2.3and9

Problem-2.3and9 - Problem 2 (a) January 1, Year 1 Cash...

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Problem 2 (a) January 1, Year 1 Cash 57,950,000 Loan payable 57,950,000 (50,000,000 1.159) December 31, Year 1 Exchange loss 450,000 Loan payable 450,000 (50,000,000 [1.168 1.159]) Interest expense (6,000,000 1.1635) 6,981,000 Exchange loss 27,000 Cash (6,000,000 1.168) 7,008,000 (b) Exchange gains (losses) would appear on the yearly income statements of Moose Utilities as shown below. Date Exchange Yearly gain (loss) on rate Loan Interest Jan.1/1 1.159 Dec.31/1 1.168 (450,000) (27,000) Dec.31/2 1.160 400,000 ) 24,000 Dec.31/3 1.152 400,000 24,000 Dec.31/4 1.155 (150,000 ) (9,000) Total (4 years) 200,000 12,000 )
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Problem 3 May 1, Year 4 Inventory 1,135,000 Accounts payable (FF) 1,135,000 (FF2,270,000 2) November 1, Year 4 Accounts payable 261,923 Exchange gain 261,923 (FF2,270,000 2.6 – 1,135,000) Accounts payable 873,077 Notes payable* 769,231 Cash 103,846 (FF2,000,000 2.6 = 769,231) (FF270,000 2.6 = 103,846) December 31, Year 4 Notes payable 242,915
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Problem-2.3and9 - Problem 2 (a) January 1, Year 1 Cash...

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