EBK ADVANCED FINANCIAL ACCOUNTING
12th Edition
ISBN: 9781260165104
Author: Christensen
Publisher: YUZU
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Chapter 11, Problem 11.17E
a.
To determine
Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate.Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.
The effect of speculation as on December 31, 20X1 on income before tax.
b.
To determine
Introduction: The rate at which currency of one country is changed to currency of another country is called foreign exchange rate. Mainly there are two rate, i.e. direct exchange rate and indirect exchange rate.Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.
The effect of speculation as on March 1, 20X2 on income before tax.
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Can you help me to calculate adjusted net income, adjusted net income if FV of security B were 285,000, value of held for trading securities as of 12/31/2020 and assuming these securities at measured at FVOCI, calculate the value of these financial assets as of 12/31/2020
Problem:
ABC Corporation buys and sells securities expecting to earn profits on short term differences in price. during 2020, ABC Corporation purchased the following held for trading securities.
Security A: Cost- 195,000; FV at 12/31/2020- 225,000
Security B: Cost- 300,000; FV at 12/31/2020- 162,000
Security C: Cost- 678,000; FV at 12/31/2020- 660,000
Before any adjustments related to these securities, ABC Corporation had net income of 900,000
At the close of business on December 31, 2021 Tempest Corp pays a $80,000 premium to purchase a foreign currency option giving Tempest the right but not the obligation to purchase 100,000 euros and sell $130,000 US dollars in six months as a hedge of a future euro rental obligation.
What is reported on the balance sheet at December 31, 2021 (in US dollars)
asset of $0
asset of $80,000
asset of $210,000
liability of $110,000
liability of $130,000
Topic Covered: Financial Risk Management Through Derivatives
On Jan. 1, 2021, ABC entered into a P1,000,000 FRA 3-9 at 11%. The actual interest rates that would be given to ABC are 12.0%, 12.5%, and 11.25% on March 31, June 30, and Sept. 30 respectively. How much is the cost savings/(incremental costs) incurred by ABC from this contract?
Notes in answering:1. Do not round off anytime during the computation. However, decimals in your solution may be shown rounded off to two to five decimal places.2. Final numerical answers must be rounded off to two decimal places (200.56 for P200.5555). Final answers in rates must be in percent, rounded off to two decimal places (6.67 for 6.6666%).
Chapter 11 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 11 - Prob. 11.1QCh. 11 - Prob. 11.2QCh. 11 - The U.S. dollar strengthened against the European...Ch. 11 - Prob. 11.4QCh. 11 - Prob. 11.5QCh. 11 - How are assets and liabilities denominated in a...Ch. 11 - Prob. 11.7QCh. 11 - Prob. 11.8QCh. 11 - Prob. 11.9QCh. 11 - Distinguish between an exposed net asset position...
Ch. 11 - Prob. 11.11QCh. 11 - Prob. 11.12QCh. 11 - Effects of Changing Exchange Rates Analysis Since...Ch. 11 - Prob. 11.2CCh. 11 - Prob. 11.5CCh. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Basic Understanding of Foreign Exposure The...Ch. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Prob. 11.7ECh. 11 - Adjusting Entries for Foreign Currency Balances...Ch. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11.1ECh. 11 - Prob. 11.11.2ECh. 11 - Prob. 11.11.3ECh. 11 - Prob. 11.11.4ECh. 11 - Prob. 11.11.5ECh. 11 - Prob. 11.11.6ECh. 11 - Prob. 11.11.7ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14.1ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.3ECh. 11 - Prob. 11.14.4ECh. 11 - Prob. 11.14.5ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.7ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16AECh. 11 - Prob. 11.17ECh. 11 - Prob. 11.18ECh. 11 - Prob. 11.19.1ECh. 11 - Prob. 11.19.2ECh. 11 - Prob. 11.19.3ECh. 11 - Prob. 11.19.4ECh. 11 - Prob. 11.19.5ECh. 11 - Prob. 11.20.1PCh. 11 - Prob. 11.20.2PCh. 11 - Prob. 11.20.3PCh. 11 - Prob. 11.20.4PCh. 11 - Prob. 11.20.5PCh. 11 - Foreign Sales Tex Hardware sells many of its...Ch. 11 - Prob. 11.22PCh. 11 - Prob. 11.23.1PCh. 11 - Prob. 11.23.2PCh. 11 - Prob. 11.24PCh. 11 - Prob. 11.25PCh. 11 - Prob. 11.26PCh. 11 - Prob. 11.27.1PCh. 11 - Prob. 11.27.2PCh. 11 - Prob. 11.27.3PCh. 11 - Prob. 11.28APCh. 11 - Prob. 11.29.1BPCh. 11 - Prob. 11.29.2BPCh. 11 - Prob. 11.29.3BPCh. 11 - Prob. 11.29.4BPCh. 11 - Prob. 11.29.5BPCh. 11 - Prob. 11.29.6BPCh. 11 - Prob. 11.30BPCh. 11 - Prob. 11.31BPCh. 11 - Matching Key Terms Match the items in the lefthand...
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