E 12-6 Accounting for foreign currency-denominated sales settled in subsequent year On October 15, 2016, Rise Corporation of the United States sold inventory items to Chai Company of Thailand for 245,000 Thai baht, to be paid on January 15, 2017. Exchange rates for Thai baht on selected dates are as follows: October 15, 2016 December 31, 2016 January 15, 2017 REQUIRED: Determine the exchange gain or loss on the sale to Chai to be included in Rise's income state- ment for the years 2016 and 2017. $0.029 $0.033 $0.030 E 12-7 Accounting for foreign currency-denominated sales Wall Corporation, a U.S. company, sold inventory items to PT Keraton of Indonesia for 300,000,000 Indonesian rupiah on July 1, 2016, when the spot rate was 13,200 Indonesian rupiah. PT Keraton paid the invoice on July 30, 2016, when the spot rate was 13,250 Indonesian rupiah. REQUIRED: Prepare Wall's journal entries for the transaction with PT Keraton on July 1 and July 30, 2016. E 12-8 [Based on AICPA] Various foreign currency-denominated transactions 1. On September 1, 2016, Ban received an order for equipment from a foreign customer for 300,000 euros, when the U.S. dollar equivalent was $400,000. Ban shipped the equipment on October 15, 2016, and billed the customer for 300,000 euros when the U.S. dollar equivalent was $420,000. Ban received the customer's remittance in full on November 16, 2016, and sold the 300,000 euros for $415,000. In its income statement for the year ended December 31, 2016, what should Ban report as a foreign exchange gain or loss? 2. On September 22, 2016, Yup purchased merchandise on account from an unaffiliated foreign company for 10,000 euros. On that date, the spot rate was $1.20. Yup paid the bill in full on March 20, 2017, when the spot rate was $1.30. The spot rate was $1.24 on December 31, 2016. What amount should Yup report as a foreign currency transaction gain or loss in its income statement for the year ended December 31, 2016? 3. On July 1, 2016, Cle borrowed 1,680,000 pesos from a foreign lender by signing an interest-bearing note due on July 1, 2017, which is denominated in pesos. The U.S. dollar equivalent of the note principal was as follows: July 1, 2016 (date borrowed) December 31, 2016 (Cle's year-end) July 1, 2017 (date paid) $210,000 240,000 280,000 In its income statement for 2017, what amount should Cle include as a foreign exchange gain or loss? 4. On July 1, 2016, Set lent $120,000 to a foreign supplier by accepting an interest-bearing note due on July 1, 2017. The note is denominated in the currency of the borrower and was equivalent to 840,000 pesos on the loan date. The note principal was appropriately included at $140,000 in the receivables section of Set's December 31, 2016, balance sheet. The note principal was repaid to Set on the July 1, 2017, due date, when the exchange rate was 8 pesos to $1. In its income statement for the year ended December 31, 2017, what amount should Set include as a foreign currency transaction gain or loss? E 12-9 Various foreign currency-denominated transactions settled in subsequent year Meo imports merchandise from some Canadian companies and exports its own products to other Canadian companies. The unadjusted accounts denominated in Canadian dollars at December 31, 2016, are as follows: and due January 15, 2017 Account payable to Fot for merchandise received Account receivable from the sale of merchandise on December 16 to Cav. Billing is for 150,000 Canadian dollars December 2 and payable on January 30, 2017. Billing is for 275,000 Canadian dollars. $103,500 $195,250