Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with what I have gotten incorrect Import/Export Transactions and Hedged Commitment The following international transactions were entered into during 2020 by Sysco Corporation,

image text in transcribedimage text in transcribedneed help with what I have gotten incorrect

Import/Export Transactions and Hedged Commitment The following international transactions were entered into during 2020 by Sysco Corporation, the largest foodservice distributor in North America: 1. June 15, 2020: Entered into a firm commitment to purchase frozen pasta entrees from Italy which will be resold in the United States. The invoice price was 4,000,000, and delivery and payment were to be made in 60 days. Concurrently, 4,000,000 was purchased in the forward market for delivery in 60 days at the forward rate of $1.15. The goods were received, payment was made, and the forward contract was settled on August 14, 2020, when the spot rate was $1.13. 2. September 1, 2020: Canned products priced at 3,000,000 zloty were sold to a food distributor in Poland when the spot rate was $0.28. Payment was received on November 3, 2020, when the spot rate was $0.26, and the zloty were immediately converted to dollars. Required Prepare the 2020 journal entries made by Sysco Corporation relating to the above transactions, Sysco is a calendar year company. Debit OX Credit 0 X 0 General Journal Date Description Aug 14 Exchange loss Investment in forward contract To record change in fair value of forward contract Firm commitment Exchange gain To record change in cost of firm commitment, in U.S. dollar terms. 0X 0 0 OX Cash X OX 0 0 0 X 0 OX 0 0X 0 X OX OX 0 0 OX 0 Investment in forward contract Inventory To record settlement of forward purchase contract. Inventory Accounts receivable To record delivery of merchandise and payment to supplier. Accounts receivable Inventory To adjust inventory balance for value of firm commitment Sep.01 Accounts receivable Sales revenue To record sales to distributor in Poland. Nov.03 Inventory Accounts receivable To record change in value of receivable. Cash Accounts receivable To record receipt of payment from customer. Cash Foreign currency To record exchange of foreign currency into dollars. OX 0 . 0 X 4 X x > 0 X 0 0 X OX 0 0 OX

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

Step: 3

blur-text-image

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

Computer Accounting With QuickBooks Online

Authors: Donna Kay

2nd Edition

1260888061, 9781260888065

More Books

Students also viewed these Accounting questions

Question

What forces are driving the added-value movement in HRM?

Answered: 1 week ago