Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the world. On December 1, Year 5, MEl sold 10,000 carvings to wholesaler in a

image text in transcribed Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the world. On December 1, Year 5, MEl sold 10,000 carvings to wholesaler in a foreign country at a selling price of 800,000 foreign currency units (FC) when the spot rate was FC1 =$0.701. The nvoice required the foreign wholesaler to remit by April 1, Year 6. On December 3, Year 5, MEl entered into a forward contract with the Royal Bank to sell FC800,000 at the 120-day forward rate of FC1 =$0.741 when the spot rate was still FC1 =$0.701. Hedge accounting s not applied. The fiscal year-end of MEI is December 31, and on this date the spot rate was FC1 =$0.737 and the forward rate was FC1 =$0.752. The payment from the foreign customer was received on April 1, Year 6, when the spot rate was FC1 $0.802. Required: a) Prepare the journal entries to record (In cases where no entry is required, please select the option "No journal entry required" or your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required.) (i) The sale and forward contracts on December 1 and 3, Year 5 (ii) Any adjustments required on December 31

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing An International Approach

Authors: Wally J. Smieliauskas, Kathryn Bewley

7th edition

1259259870, 1259087468, 70968292, 978-1259087462

More Books

Students also viewed these Accounting questions

Question

Explain the legal environments impact on labor relations. page 631

Answered: 1 week ago