G H Ltd exports goods to Harlom Inc. All sales contracts are denominated in US dollars. Sales of US$5 million a ade on 1 May 2022, FOB Sydney. The amount is due for payment by Harlom Inc. on 1 September 2022. Platypus L porting date is 30 June. dditional information ate Spot rate May 2022 A$1.00 US$0.84 June 2022 A$1.00 US$0.85 eptember 2022 A$1.00= US$0.86 QUIRED
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- Mozzie Ltd has a functional currency of A$. On 1 April 2023, Mozzie Ltd sells goods to a customer on credit terms for US$80 000. On 1 August 2023, cash is received from the customer to settle the invoice Exchange rates are:1 April 2023 US$1.00 = A$1.3030 June 2023 US$1.00 = A$1.551 August 2023 US$1.00 = A$1.45What is the journal entry at the date of cash receipt on 1 August 2023? a. DR. Cash $124 000CR. Foreign Exchange Gain $8 000CR. Accounts Receivable $116 000 b. DR. Cash $55 172CR. Foreign Exchange Gain $3 559CR. Accounts Receivable $51 612 c. DR. Cash $116 000DR. Foreign Exchange Loss $8 000CR. Accounts Receivable $124 000 d. DR. Cash $116 000CR. Foreign Exchange Gain $20 000CR. Accounts Receivable $104 000Max Ltd sells equipment to Star Ltd, a U.S. company on 30/01/2020 for US$250,000. Goods are invoiced in US dollars. Payment is made on 5/03/2020. The company also buys parts from the USA, also invoiced in US$, value US$187,500 on 20/4/2020. The functional currency of Max Ltd is AUD$. As at 30/06/2020, this debt unpaid. Rates: 30/01 – A$1 = US$0.93 5/03 – A$1 = US$0.92 20/4 – A$1 = US$0.94 30/6 – A$1 = US$0.91 Required: SHOW YOUR WORKINGS Prepare journal entries for the above transactions. (Round answers to the nearest dollar, e.g. $200,263.57 = $200,264).8. Assume that your company purchases inventories from a supplier on December 15. The invoice specifies that payment is to be made on March 15 in Euros in the amount of 10,000 Euros. Your company operates on a calendar year basis. Assume the following exchange rates and the company does not enter into any hedging arrangements: December 15 $1.35 :1 Euro December 31 $1.37 :1 Euro March 15 $1.38 :1 Euro Requirement: Prepare the journal entry that needs to be made on March 15
- Mozzie Ltd has a functional currency of A$. On 1 April 2023, Mozzie Ltd sells goods to a customer on credit terms for US$100 000. On 1 August 2023, cash is received from the customer to settle the invoice Exchange rates are:1 April 2023 US$1.00 = A$1.3030 June 2023 US$1.00 = A$1.501 August 2023 US$1.00 = A$1.40What is the journal entry to record the sale transaction on 1 April 2023? a. DR Accounts Receivable $130 000CR Sales $130 000 b. DR Accounts Receivable $130 000DR Foreign Exchange Loss $20 000CR Sales $150 000 c. DR Accounts Receivable $150 000CR Foreign Exchange Gain $20 000CR Sales $130 000 d. DR Inventory $130 000CR Accounts Payable $130 000Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2019 and 2020. 2019 Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.1043 on this day. July 21 Sold merchandise on credit to Sumito Corp. in Japan. The price of 1.5 million yen is to be paid 120 days from the date of sale. The exchange rate for yen is $0.0094 on this day. Oct. 14 Sold merchandise for 19,000 pounds to Smithers Ltd. of Great Britain, payment in full to be received in 90 days. The exchange rate for pounds is $1.4566 on this day. Nov. 18 Received Sumito’s payment in yen for its July 21 purchase and immediately exchanged the yen for dollars. The exchange rate for yen is $0.0092 on this day. Dec. 20 Sold merchandise for 17,000 ringgits to Hamid Albar of Malaysia, payment in full to be received in 30 days. On this day, the exchange rate for ringgits is $0.4501. Dec. 31 Recorded adjusting entries…On April 10, 2019, when the spot rate is $1.10/€, a U.S. company sells merchandise to a customer in Italy. The spot rate is $1.11/€ on June 30, the company’s year‑end. Payment of €100,000 is received on August 10, 2019, when the spot rate is $1.08/€. What is the effect on fiscal 2019 and 2020 income? Fiscal 2019 Fiscal 2020 a. $1,000 exchange loss $3,000 exchange gain b. No effect $2,000 exchange loss c. No effect $2,000 exchange gain d. $1,000 exchange gain $3,000 exchange loss
- 1. On May 20, 2019, when the spot rate is $1.08/€, a U.S. company buys merchandise from a supplier in Italy, at a cost of €100,000. The spot rate is $1.05/€ on June 30, the company’s year‑end. Payment of €100,000 is made on July 30, 2019, when the spot rate is $1.12/€. What is the effect on fiscal 2019 and fiscal 2020 income? Fiscal 2019 Fiscal 2020 a. No effect $4,000 exchange loss b. $3,000 exchange loss $7,000 exchange gain c. No effect $4,000 exchange gain d. $3,000 exchange gain $7,000 exchange lossOn October 1, 2023, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2024, for a price of 1,032,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2023, to sell PLN 1,032,000 in four months (on January 31, 2024). U.S. dollar-Polish zloty exchange rates are as follows: Date October 1, 2023 December 31, 2023 January 31, 2024 Spot Rate $ 0.25 0.28 0.30 Forward Rate (to January 31, 2024) $ 0.29 0.32 N/A Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored. Required: a. Prepare journal entries for the foreign currency forward contract, foreign currency firm…5. On April 10, 2022, when the spot rate is $1.20/€, a U.S. company sells merchandise to a customer in Italy at a price of € 100,000. The spot rate is $1.21/€ on June 30, the company's year-end. Payment, in euros, is received on August 10, 2022, when the spot rate is $1.18/€. What amount does the company report as accounts receivable on its June 30, 2022, balance sheet? Select one: a. $118,000 b. $121,000 c. $100,000
- On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,000,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows: Date Spot Rate Forward Rate(to January 31, 2021) October 1, 2020 $ 0.25 $ 0.29 December 31, 2020 0.28 0.31 January 31, 2021 0.30 N/A Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored. Prepare journal entries for the foreign currency forward contract,…On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,000,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows: Date Spot Rate Forward Rate(to January 31, 2021) October 1, 2020 $ 0.25 $ 0.29 December 31, 2020 0.28 0.31 January 31, 2021 0.30 N/A Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored. Prepare journal entries for the foreign currency forward contract,…2. On November 15, 2020, Celt, Inc., a Philippine company located in Baguio City, ordered merchandise FOB shipping point from a German Company for 200,000 marks. The merchandise as shipped and invoiced to Celt on December 10, 2009. Celt paid the invoice on January 1, 2021. The spot rates for marks on the respective dates are as follows: November 15, 2020 December 10, 2020 P22.4955 22.4875 December 31, 2020 22.4675 January 10, 2021 22.4475 In Celt's December 31, 2020 income statement, the foreign exchange gain is?