19,000 dinars to be made on March 1, 2021 The materials are consumed immediately and recognized as cost of goods sold at the of purchase. On December 1, 2020, Icebrcaker enters into a forward contract to purchase 19,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various cates are as follows: Forward Rate Date December 1, 2020 December 31, 2029 Harch 1, 2021 Spot Rate $ 3.70 3. 8e 3.95 (to March 1, 2021) $ 3.775 3.900 N/A a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journa entries for the import purchase and foreign currency forward contract in U.S. dollars. 2. What is the impact on 2020 net income? e-3. What is the impact on 2021 net income? a-4. What is the Impact on net income over the two accounting perlods? b-1. Assuming that icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepere journal

19,000 dinars to be made on March 1, 2021 The materials are consumed immediately and recognized as cost of goods sold at the of purchase. On December 1, 2020, Icebrcaker enters into a forward contract to purchase 19,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various cates are as follows: Forward Rate Date December 1, 2020 December 31, 2029 Harch 1, 2021 Spot Rate $ 3.70 3. 8e 3.95 (to March 1, 2021) $ 3.775 3.900 N/A a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journa entries for the import purchase and foreign currency forward contract in U.S. dollars. 2. What is the impact on 2020 net income? e-3. What is the impact on 2021 net income? a-4. What is the Impact on net income over the two accounting perlods? b-1. Assuming that icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepere journal

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On December 1, 2022, GAZA Company purchased Equipment from Ispanya by 100,000 Euro payable on March 31, 2023. At the same time GAZA entered into a 120-day forward contract with :ALQUDS Bank to purchase 100,000 Euro in March 31, 2023 to hedge risk of changes in exchange rates. GAZA's fiscal year ends on December 31. The direct exchange rates follow Date Spot Rate Forward Rate December 1, 20X1 December 31, 20X1 0.600 0.610 0.609 0.612 March 31, 20X2 0.602 Required: Prepare all journal entries for GAZA
Accounting Car Corp. (a U.S.-based company) sold parts to a Japanese customer on December 1, 2020, with payment of 10 million Japanese yen to be received on January 31, 2021. The following exchange rates applied: Date Spot rate Forward rate to 01/31/21 0.00090 0.00093 0.00092 0.00098 0.00095 December 1, 2020 December 31, 2020 January 31, 2021 Assuming a forward contract was entered into, what would be the net impact on Car Corp.'s 2020 income statement related to this foreign currency transaction? Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is .9901. A. $295.05 (loss). B. $ 300 (gain). C. $ 300 (loss). D. $ 700 (gain). E. $ 700 (loss). 0.00095
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Dd5.
On Mei 31, 2016, PT Risa sold the item to PT Bulan (functional currency is US $) for of the total $ 30,000 invoice by November 31, 2018. The functional currency of PT Risa is IDR , and the effective date is December 31st. Exchange rate between $ and IDR: Mei 31, 2016 ($1) : Spot rate = IDR 15,575 US$1 , Forward rate (6 months) = IDR 15,375 November 31, 2016 ($1) : Spot rate = IDR 14,250 PT Risa completed the forex risk hedging transaction on November 31, 2016 by signing a forward contract to sell US $ for $ 30,000. PT Risa also chose to apply fair value hedging accounting in accordance with PSAK71. prepare journal entries recorded by PT Risa on Mei 31, 2016 and November 31, 2016. Please explain !
Haresh
H9.
On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows: Spot Rate Forward Rate for March 12, 20X6 December 12, 20X5 $ 0.88 $ 0.90 December 31, 20X5 0.98 0.93 3. Dahl entered into the first forward contract to manage the foreign currency risk from a purchase of inventory in November 20X5, payable in March 20X6. The forward contract is not designated as a hedge. At December 31, 20X5, what amount of foreign currency transaction gain should Dahl include in income from this forward contract? multiple choice $10,000 $0 $5,000 $3,000 4. Dahl entered into the second forward contract to hedge a commitment to purchase equipment being manufactured to Dahl’s specifications. At December 31, 20X5, what amount of foreign currency transaction gain should Dahl include in income from this forward contract? multiple choice $10,000 $0 $5,000…
3. XYZ Corp., U.S.-based company, bought parts from a South Korean supplier on December 1, 2020, with 40 million Korean won to be paid on January 31, 2021. The following exchange rates applied: For V Date Spot Rate $0.0092 368, $0.0090 (2000) January 31, 2021 $0.0095 Assuming a forward contract was entered into on December 1, 2020, what would be the net impact on XYZ's 2020 income statement related to this foreign currency transaction? Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is .9901. Le A/P .0093. December 1, 2020 December 31, 2020 Forward Rate to 01/31/2021 $0.0098 $0.0093 N/A $19,802 increase in net income - $8,000 decrease in net income $8,000 increase in net income - $11,802 decrease in net income $11,802 increase in net income - $19,802 decrease in net income 00% 6 x 41 10 149 -80bb1-
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Clark Co., a U.S. corporation, sold inventory on December 1, 2021, with payment of 12,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: Spot rate: $1.831 Dec. 31 Spot rate: $1.976 Jan. 30 Spot rate: $1.768 Dec. 1 For what amount should Sales be credited on December 1? Multiple Choice $21,216. $21,972. $23,712. $19,760. $18,310.