ANSWER THE PROBLEM BELOW:

Problem 2 (Speculation) Mellaware Company, a money changer in the Philippines, entered into the following forward contracts for speculative purposes. 2008. October 1, 2008. 180-day contract to buy 400,000 Japanese Yen. On this date, the spot rate was P.38 and the 180-day forward rate was P.40. On December 31, 2008, the spot rate was P.32 and the 90-day forward rate was P.41. On April 1, 2009, the spot rate was P.43 2009. December 1, 2008. 90-day contract to sell 2,000,000 Rupiah. On December 1, 2008, the spot rate was P.0048 and the forward rate was P0.0046. On December 31, 2008, the spot rate was P.0047 and the 60-day forward rate was P.0045. On March 1, 2009, the spot rate was P.0049. Required: Prepare all journal entries necessary to record the above events on the books of Mellaware Company. Assume a December 31, 2008 fiscal year-end.Assignment 5 Accounting for Foreign Currency Transactions Problem 1 (Importing and Exporting Transactions) Swarovski Jewels Inc., a Philippine dealer of jewelries has several transactions with foreign entities. Each transaction is denominated in the local currency unit of the country in which the foreign entity is located. For each of the following independent case, determine the December 2009, year-end balance in the appropriate accounts for the case. Case 1: On November 2, 2009, Swarovski Jewels Inc purchased goods from Hongkong at a price of 40,000 Hongkong dollars when the direct exchange rate was 1 Wig$ = P4.50. The account has not been settled as of December 31, 2009 when the exchange rate has decreased to 1 Hkg$ = P4.00. Case 2: On November 28, 2009, Swarovski Jewels Inc sold goods to a Taiwan company at a price of 20,000 NT Dollars when the direct exchange rate was 1 NT Dollar = P1.80. The account has not been settled as of December 31, 2009 when the exchange rate has increased to 1 NT Dollar = P1.90. Case 3: On December 1, 2009, Swarovski Jewels Inc purchased goods from Japan at a price of 60,000 yen when the direct exchange rate was 1 yen = P.40. The account has not been settled as of December 2009 when the exchange rate has increased to 1 yen = P.45. Case 4: On December 1, 2009, Swarovski Jewels Inc sold goods to Indonesian Company at a price of 2,500,000 Baht when the direct exchange rate was 1 Baht = P.003. The account has not been settled as of December 31, 2009 when the exchange rate has decreased to 1 Baht = P.0025.Required: Provide the December 31, 2009, year-end balances on the records of Swarovski Jewels Inc, Inc. for each of the following applicable items: Foreign Foreign Accounts Accounts Currency Currency Receivable Payable Transactions Transactions Exchange Loss Exchange Gain Case 1 Case 2 Case 3 Case 4 1IIIProblem 3 (Exposed Asset Position) On December 1, 2009, Baguio Company sold fumiture to Saudi Company. The purchase price of 100,000 Rial is payable in Rial on March 1, 2010. To hedge this foreign currency exposure, Baguio Company sold 100,000 Rial for delivery on March 1, 2010. The following exchange rates applied: Spot Rate Forward Rate December 1, 2009 P12.80 P12.40 (90-day) December 31, 2009 (fiscal year-end) 12.70 12.60 (60-day) March 1, 2010 12. 90 12.60 Required: Prepare journal entries to record the events on Baguio Company's books