Question

Question No: 3 Numerical Problems:                                    SLO: 2 &am

Question No: 3 Numerical Problems:                                    SLO: 2 & 3.

Note: Answer the following questions:   

                                                                                                                                                                                                                                                   

Question No: 1                                                                                         SLO: 1                                       

  1. On December 1, 2013, Dorn Corporation agreed to purchase a machine to be manufactured by a company in Brazil. The purchase price is 1,150,000 Brazilian reals. To hedge against fluctuations in the exchange rate, Dorn entered into a forward contract on December 1 to buy 1,150,000 reals on April 1, the agreed date of machine delivery, for $0.375 per real.

The following exchange rates were quoted:

Forward Rate

Date    Spot Rate                 (Delivery on 4/1)

December 1                                 0.390                       0.375

December 31                               0.370                       0.373

April 1 0.385                                      --

Required:

Prepare journal entries necessary for Dorn during 2013 and 2014 to account for the transactions described

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Duck Corporation “forecasted” on December 21, 2017 to sell a machine to a company in Italy....
Duck Corporation “forecasted” on December 21, 2017 to sell a machine to a company in Italy. The selling price was 500,000 euros, to be paid on March 21, 2018. To hedge against fluctuations in the exchange rate, Duck entered into a forward contract on Dec. 21, 2017 to sell 500,000 euros on March 21, 2018, the agreed date of machine delivery, for $1.227 per euro. The company ends its fiscal year on December 31. The following exchange rates were quoted:...
Board Company has a foreign subsidiary that began operations at the start of 2017 with assets...
Board Company has a foreign subsidiary that began operations at the start of 2017 with assets of 148,000 kites (the local currency unit) and liabilities of 86,000. During this initial year of operation, the subsidiary reported a profit of 42,000 kites. It distributed two dividends, each for 6,600 kites with one dividend declared on March 1 and the other on October 1. Applicable exchange rates for 1 kite follow: January 1, 2017 (start of business) $0.85 March 1, 2017 0.83...
1.Chapter 3, Question 6. Bid/Ask Spread Utah Bank’s bid price for Canadian dollars is $.7938 and...
1.Chapter 3, Question 6. Bid/Ask Spread Utah Bank’s bid price for Canadian dollars is $.7938 and its ask price is $.8100. What is the bid/ask percentage spread? 2.Chapter 3, Question 10. Indirect Exchange Rate If the direct exchange rate of the euro is $1.25, what is the euro’s indirect exchange rate? That is, what is the value of a dollar in euros? 3.Chapter 3, Question 11. Cross Exchange Rate Assume Poland’s currency (the zloty) is worth $.17 and the Japanese...
QUESTION 3 Suppose that your colleague has approached you with an opportunity to lend $25,000 to...
QUESTION 3 Suppose that your colleague has approached you with an opportunity to lend $25,000 to her laundry business in Accra. The business, called Do it yourself launderette, plans to offer home services to customers at area. Funds would be used to lease a delivery vehicle, purchase supplies, and provide working capital. Terms of the proposal are that you would receive $5,000 at the end of each year in interest with the full $25,000 to be repaid at the end...
QUESTION 2 (IAS 28 &IFRS 3) (10) Ramon Ltd invested in the equity of Amani Ltd...
QUESTION 2 (IAS 28 &IFRS 3) (10) Ramon Ltd invested in the equity of Amani Ltd a number of years ago. The payment for the 30% investment in the equity of Amani Ltd was agreed at $500 000. Ramon Ltd can appoint 2 out of 5 directors of Amani’s Board of Directors and accounts for the investments in its consolidated financial statements in terms of the equity method. Ramon Ltd also owns a controlling interest in various other subsidiaries. Information...
Problem Three: Ignore GST. The following potential errors were discovered during the financial year ending December...
Problem Three: Ignore GST. The following potential errors were discovered during the financial year ending December 31, 2017 for Oscar Ltd: 1.          A machine with a cost of $22,500 and accumulated depreciation to the date of sale of $16,000 was sold for $8,000. The sale was recorded by a debit to Cash and a credit to Machinery for $8,000. 2.     On April 1, 2017, a franchise was purchased for $120,000 with an estimated 10 year life and no right of...
Question 5 A plant site donated by a township to a manufacturer that plans to open...
Question 5 A plant site donated by a township to a manufacturer that plans to open a new factory should be recorded on the manufacturer's books at ___________. Question 5 options: A. the nominal cost of taking title to it i B. Its fair value C. one dollar (since the site cost nothing but should be included in the balance sheet) D. the value assigned to it by the company's directors Question 6 Which of the following costs are capitalized...
Question 36 ABC Company issues $10,000,000, 8%, 10-year bonds at 96.5 on July 1, 2019. Interest...
Question 36 ABC Company issues $10,000,000, 8%, 10-year bonds at 96.5 on July 1, 2019. Interest is paid on July 1 and January 1. The journal entry to record the issuance will include a debit to cash for $10,000,000 a credit to cash for $9,650,000 a credit to bonds payable for $9,650,000 a debit to discount on bonds payable for $350,000 Question 37 DEF Corporation retires its $100,000 face value bonds at 105 on January 1, following the payment of...
Question 13 On April 1, a machine with a useful life of 4 years and a...
Question 13 On April 1, a machine with a useful life of 4 years and a residual value of $12,000 was purchased for $87,000. What is depreciation expense for the second year under double declining balance depreciation assuming a December 31 year end? Select one: a. $21,750 b. $18,750 c. $27,188 d. $23,438 Question 14 If a fixed asset with an original cost of $18,000 and accumulated depreciation of $12,000 is sold for $15,000, the company must __________. Select one:...
During the trial, lawyers for the accused said that the men believed that the accounting decisions...
During the trial, lawyers for the accused said that the men believed that the accounting decisions they made were appropriate at the time, and that the accounting treatment was approved by Nortel’s auditors from Deloitte & Touche. Judge Marrocco accepted these arguments. Marrocco added he was “not satisfied beyond a reasonable doubt” that the trio (i.e., Dunn, Beatty, and Gollogly) had “deliberately misrepresented” financial results. Given the facts of the case, do you believe Judge Marrocco’s decision was justified? Explain....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT