ACTIVITY 4: PROBLEM A Assume that on November 1, 2020 the ordered 1,200 units of inventory from U.S. firm for $24,000. The inventory was shipped and invoiced to the Philippine firm on December 1, 2020, to be paid on March 1, 2021. The firm's fiscal year end is December 31. Assume further that the Philippine firm did not engage in any form of hedging activity. Spot rates for US dollars at various times are as follows:

Buying Spot Rates Selling Spot Rates

November 1, 2020 P39.80 P40.25

December 1, 2020 P40.00 40.55

December 31, 2020 40.70 40.80

March 1, 2021 40.60 40.65

REQUIRED:

1. Prepare all entries on the Corporations books to record the above transactions.

2. Determine the following:

a. Foreign Exchange Gain or Loss on:

1. December 1, 2020

2. December 31, 2020

3. March 1, 2021

B. On December 31, 2020:

1. Accounts Payable

2. Inventory