November 1, 2017 December 31, 2017 January 15, 2018 $0.754 0.742 0.747

Company X is a U.S.-based IT company with operations and earnings in a number of foreign countries. The company's profits by subsidiary, in local currency (in millions), are shown in the following table for 2019 and 2020. Net Income Japanese Subsidiary Britih Subsidiary 2019 JPY 200 GBP 100.00 2020 JPY 1,480 GBP 108.40 The average exchange rate for each year, by currency pairs, is the following. Exchange Rate USD = 1 GBP JPY = 1 USD 2019 97.57 1.5646 2020 90.88 1.6473 Use the above data, Students answer the following questions. a. What is Company X's consolidated profits in U.S. dollars in 2019 and 2020? b. If the same exchange rates are used for both years, what is the change in corporate earnings on a "constant currency" basis? c. Using the results of the constant currency analysis in part b, is it possible to separate Company X's growth in earnings between local currency earnings and foreign exchange rate impacts on a consolidated basis?

Brandt Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2020, with payment of 10 million South Korean won to be received on March 31, 2021. The following exchange rates apply:   Date Spot Rate Forward Rate(to March 31, 2021) December 1, 2020 $ 0.0035   $ 0.0034   December 31, 2020   0.0033     0.0032   March 31, 2021   0.0038     N/A         1. Assuming that Brandt did not hedge his foreign exchange risk, how much foreign exchange gain or loss should it report on its 2020 income statement with regard to this transaction?   a. 3000 gain b. 2000 loss c. 5000 gain d. 1000 loss     2. Assuming that Brandt entered into a forward contract to sell 10 million South Korean won on December 1, 2020, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2020 resulting from a fluctuation in the value of the won? Brandt amortizes forward points on a monthly basis using a straight-line method. Ignore…

1 . PL Co purchased goods on credit from a US supplier costing $US 225,000 on 5th June 2020 when the exchange rate was A$1 = US0.69 . On 30 June 2020, balance date , the exchange rate was A$1 = US0.72 . PL Co paid the US supplier on 7th July 2020 when the exchange rate was A$1 = 0.74. Required : Prepare the journal entries for the above

ASSUME THAT THE U.S. DOLLAR IS THE FUNCTIONAL CURRENCY. Ruthie Inc. had a debit adjustment of $7900 for the year ended December 31, 2019, from restating its foreign subsidiary's accounts from their local currency units into U.S. dollars. Additionally, Ruthie had a receivable from a foreign customer. It is denominated in the customer's local currency. On December 31, 2018, this receivable for 300,000 local currency units (LCU) was correctly included in Ruthie's balance sheet at $124200. When the receivable was collected on February 15, 2019, the U.S. dollar-equivalent was $122200. In Ruthie's 2019 consolidated statement of income, how much should be reported as foreign exchange gain/(loss) in computing net income? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. IF THE NUMBER IS NEGATIVE, TYPE -1000 INSTEAD OF ($1,000) Your Answer:

On October 15, 2009, Talud Limited, a Canadian company, sold a custom er in England for €10,000, when the exchange rate was €1 = $2.20. On December 31, 2009, the exchange rate at Talud's year-end was €1 = 2.25 and dropped to €1 = 2.10 on the settlement date, February 15, 2010. Record journal entries on the date of sale, year-end adjustment, and settlem ent date.

ASSUME THAT THE LOCAL CURRENCY UNIT IS THE FUNCTIONAL CURRENCY. Cade Inc. had a debit adjustment of $6400 for the year ended December 31, 2019, from restating its foreign subsidiary's accounts from their local currency units into U.S. dollars. Additionally, Cade had a receivable from a foreign customer. It is denominated in the customer's local currency. On December 31, 2018, this receivable for 300,000 local currency units (LCU) was correctly included in Cade's balance sheet at $121000. When the receivable was collected on February 15, 2019, the U.S. dollar-equivalent was $123800. In Cade's 2019 consolidated statement of income, how much should be reported as foreign exchange gain/(loss) in computing net income? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. IF THE NUMBER IS NEGATIVE, TYPE -1000 INSTEAD OF ($1,000) Your Answer:

ABC Corp., a US corporation, purchased goods on credit from a British company on April 8, 2007. ABC made a payment of 10,000FC on May 8, 2007. The exchange rate was $1= FC .50 on April 8 and $1= FC .60 on May 8. What amount of foreign exchange gain or loss should be recognized on May 8 ?

Assume that Gilligan Ltd enters into a contract to buy inventory from an overseas supplier. On1 February 2023 it acquires the material at a cost of US$500,000 payable in two months’ time.The exchange rate at the time is A$1 = US$1.15. The actual debt is considered to be a tradepayable and is a primary financial instrument. The exchange rate on 1 April 2023 is A$1 =US$1.09.Required:(a) As the debt is payable in two months’ time describe the potential risk to Gilligan Ltd.(b) Assume that McCoy Ltd is concerned about possible adverse exchange ratemovements, what action could the company take?

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