the accounting entries in FUTURE Co July 31 Foreign purchases 146 A P 20 73 146

The accounting entries in future co july 31 foreign

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the accounting entries in FUTURE Co July 31 Foreign purchases 146 A / P ($20 7.3) 146 Forward contract ($20 7.3) 146 Deferred loss 4 Forward contract payable ($20 7.5) 150 Aug 31 Forward contract payable 75 Cash 75 Cash ($10 7.9) 79 Forward contract Forward contract gain 73 6 A / P ($10 7.3) 73 Foreign Exchange loss 6 Cash ($10 7.9) 79
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Oct 30 Forward contract payable 75 Cash 75 Cash ($10 7.2) 72 Forward cont. loss 1 Forward contract 73 A/P ($10 7.3) Foreign Exchange gain Cash($10 7.2) 73 1 72 Dec. 31 Forward cont. exp 4 Deferred loss 4 Forward contract gains 5 Income summary 4 Forward contract Exp 4 Foreign Exchange loss 5
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Example 5 ( unsettled transaction) Date Rate of exchange (L.E for each USD) Rate of exchange (€ for each USD) June 21, 2014 7.6 1.5 July 31, 2014 7.3 1.4 Aug. 31, 2014 7.9 1.6 Oct. 31, 2014 7.2 1.5 Nov. 30, 2014 7.1 1.5 Dec. 31, 2014 7.4 1.3 mar. 31, 2015 7.2 1.5 On June 21, 2014 FUTURE Co. From Egypt had ordered industrial products from LON Group from France for 20 million USD which are to be paid through two equal payments after one and three months from the transaction date. The products have been shipped on July 31, 2014. At that time FUTURE Co, entered into a forward contract with Misr Bank to buy 20 million Dollar divided into two amounts on August 31 and mar. 31,2015 at the forward rate (7.5) EGP. and LON Group, entered into a forward contract with France Bank to sell 20 million Dollar divided into two amounts on August 31 and mar. 31,2015 at the forward rate ( 1.3 ). Required: Prepare the accounting entries in FUTURE Co & LON Group. The exchange rates were as follows:
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the accounting entries in LON Group July 31 A / R ($ 20 1.4) 28 2014 Foreign sales 28 Forward contract receivable ($20 1.3) 26 Deferred loss 2 Forward contract ($ 20 1.4) 28 Aug 31 Cash ($10 1.6) 16 2014 A / R ($ 10 1.4) 14 Foreign Exchange gains 2 Forward contract Forward contract loss cash($ 10 1.6) 14 2 16 Cash($ 10 1.3) 13 Forward contract receivable 13
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the accounting entries in LON Group Dec.31 Foreign Exchange loss 1 2014 A / R ($ 10 (1.4-1.3) 1 Forward contract 1 Forward contract gain 1 Forward contract exp 1.25 Deferred loss(2*5/8) 1.25 Foreign Exchange gain Income summary Forward contract loss Forward contract exp 1 1..25 1 1.25
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mar.31 Cash ($10 1.5) 15 2015 A / R($ 10 1.3) 13 Foreign Exchange gain 2 Forward contract 13 Forward contract loss 2 Cash($ 10 1.5) 15 Cash 13 Forward contract receivable. 13 Dec 31 Forward contract Exp .75 2015 Deferred loss .75 Foreign Exchange gain Income summary Forward contract Exp Forward contract loss 2 .75 .75 2
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the accounting entries in FUTURE Co July 31 Foreign purchases 146 A / P ($20 7.3) 146 Forward contract ($20 7.3) 146 Deferred loss 4 Forward contract payable ($20 7.5) 150 Aug 31 Forward contract payable 75 Cash 75 Cash ($10 7.9) 79 Forward contract Forward contract gain 73 6 A / P ($10 7.3) 73 Foreign Exchange loss 6 Cash ($10 7.9) 79
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the accounting entries in LON Group Dec.31 Foreign Exchange loss 1 2014 A / R ($ 10 (7.4-7.3) 1 Forward contract 1 Forward contract gain 1 Forward contract exp 2.5 Deferred loss(4*5/8) 2.5 Forward contract gain Income summary Foreign Exchange loss Forward contract exp 7 2.5 7 2.5
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mar. 30 Forward contract payable 75 2015 Cash 75 Cash ($10 7.2) 72 Forward cont. loss 2 Forward contract 74 A/P ($10 7.4)
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  • Spring '16
  • osama
  • Accounting, 1944, United States dollar, 1977, 1953

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