Required information Skip to question On December 5, 20X8, Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 20X9. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 20X8 1 riyal = $ 0.265 December 31, 20X8 1 riyal = 0.262 January 10, 20X9 1 riyal = 0.264 Based on the preceding information, what journal entry would Imperial make on December 31, 20X8, to revalue foreign currency payable to equivalent U.S. dollar value? A. Accounts Payable (SAR) 300 Foreign Currency Transaction Gain 300 B. Accounts Payable (SAR) 100 Foreign Currency Transaction Gain 100 C. Foreign Currency Transaction Loss 300 Accounts Payable (SAR) 300 D. Foreign Currency Transaction Loss 200 Accounts Payable (SAR) 200

Required information Skip to question On December 5, 20X8, Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 20X9. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 20X8 1 riyal = $ 0.265 December 31, 20X8 1 riyal = 0.262 January 10, 20X9 1 riyal = 0.264 Based on the preceding information, what journal entry would Imperial make on December 31, 20X8, to revalue foreign currency payable to equivalent U.S. dollar value? A. Accounts Payable (SAR) 300 Foreign Currency Transaction Gain 300 B. Accounts Payable (SAR) 100 Foreign Currency Transaction Gain 100 C. Foreign Currency Transaction Loss 300 Accounts Payable (SAR) 300 D. Foreign Currency Transaction Loss 200 Accounts Payable (SAR) 200

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter10: Measuring Exposure To Exchange Rate Fluctuations

Section: Chapter Questions

Problem 1IEE

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On December 5, 20X8, Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for 100,000 riyals (SAR), to be paid on January 10, 20X9. The transaction is denominated in Saudi riyals. Imperial's fiscal year ends on December 31, and its reporting currency is the U.S. dollar. The exchange rates are: December 5, 20X8 1 riyal = $ 0.265 December 31, 20X8 1 riyal = 0.262 January 10, 20X9 1 riyal = 0.264 Based on the preceding information, what journal entry would Imperial make on January 10, 20X9, to revalue foreign currency payable to equivalent U.S. dollar value?A. Accounts Payable (SAR) 300 Foreign Currency Transaction Gain 300 B. Accounts Payable (SAR) 100 Foreign Currency Transaction Gain 100 C. Foreign Currency Transaction Loss 100 Accounts Payable (SAR) 100D. Foreign Currency Transaction Loss 200 Accounts Payable (SAR) 200
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(a) ABC Co has a year end of 31 December 20X1 and uses the dollar ($) as its functional currency. On 25 October 20X1 ABC Co buys goods from a Swedish supplier for Swedish Krona (SWK) 286,000. Rates of exchange: 25 October 20X1 $1 = SWK 11.16 16 November 20X1 $1 = SWK 10.87 31 December 20X1 $1 = SWK 11.02 Required: Show the accounting treatment for the above transactions if: (a) A payment of SWK286,000 is made on 16 November 20X1. (b) The amount owed remains outstanding at the year-end date.
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Clark Stone purchases raw material from its foreign supplier, Rinne Clay, on May 8. Payment of 1,500,000 foreign currency units (FC) is due in 30 days. May 31 is Clark's fiscal year-end. The pertinent exchange rates were as follows: Маy 8 Мay 31 Spot rate: $1.16 Spot rate: $1.18 Spot rate: $1.12 June 7 For what amount should Clark's Accounts Payable be credited on May 8? Multiple Choice $1,770,000. $1,680,000. $1,740,000. $1,850,000. $1,500,000.
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