Advanced Accounting
7th Edition
ISBN: 9781119373209
Author: JETER, Paul K. Chaney
Publisher: WILEY
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Textbook Question
Chapter 12, Problem 9P
Consider the following information:
- 1. On December 1. 2011. a U.S. firm plans to sell a piece of equipment [with an asking price of 200,000 units of a foreign currency FC)] during January of 2012. The transaction is probable, and the transaction is to the denominated in euros.
- 2. The company enter into a forward contract on December 1. 2011 to sell 200.000 FC on February 1, 2012. for $1.02.
- 3. Spot rates and the forward rates for January 31, 2012. settlement were as follows (dollars per mum):
- 4. spot January 31, the equipment was sold for 200,000(K) [C. The cost of the equipment was 5170.000.
Required:
- A. Prepare all
journal entries needed on December 1, December 31, January 31, and February 1 to account for theforecasted transaction. the forward contract, and the transaction to sell the equipment. - B. Prepare any entry needed on February 1 to reclassify amounts from other accumulated comprehensive income into earnings.
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Chapter 12 Solutions
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