Wolters Corporation is a U.S. corporation that purchased 50,000 chocolate bars from a foreign manufacturer on March 1, 2024 for 80,000 foreign currency units, to be paid on April 30, 2024. On March 1, 2024 Wolters also entered into a forward contract to purchase 80,000 foreign currency units on April 30, 2024. Wolters has a March 31 year end. Exchange rates are as follows: Date Spot Rate Forward Rate 3/1/24 $0.69 $0.65 3/31/24 $0.61 $0.63 4/30/24 $0.66 $0.66 Required: Prepare the journal entries to record the transactions through April 30, 2024. March 31 is the fiscal period end. Ignore the split between spot gain/loss and time value.

Wolters Corporation is a U.S. corporation that purchased 50,000 chocolate bars from a foreign manufacturer on March 1, 2024 for 80,000 foreign currency units, to be paid on April 30, 2024. On March 1, 2024 Wolters also entered into a forward contract to purchase 80,000 foreign currency units on April 30, 2024. Wolters has a March 31 year end. Exchange rates are as follows: Date Spot Rate Forward Rate 3/1/24 $0.69 $0.65 3/31/24 $0.61 $0.63 4/30/24 $0.66 $0.66 Required: Prepare the journal entries to record the transactions through April 30, 2024. March 31 is the fiscal period end. Ignore the split between spot gain/loss and time value.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter10: Measuring Exposure To Exchange Rate Fluctuations

Section: Chapter Questions

Problem 2ST

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