Tex Hardware sells many of its products overseas The following are some selected transactions Tex sold electronic subassemblies to a firm in Denmark for 150,000 Danish kroner (Dkr) on June 6, when the exchange rate was Dkr 1 $0 1775 Collection was made on July 3 when the rate was Dkr 1 $0 1778 On July 22, Tex sold copper fittings to a company in London for 34,000 with payment due on September 20 Also, on July 22, Tex entered into a 60 day forward contract to sell 34,000 at a forward rate of 1 $1 630 The forward contract is not designated as a hedge The spot rates follow July 22 1 $ 1 580 September 20 1 $ 1 612 Tex sold storage devices to a Canadian firm for C$79,000 (Canadian dollars) on October 11, with payment due on November 10 On October 11, Tex entered into a 30 day forward contract to sell Canadian dollars at a forward rate of C$1 $0 730 The forward contract is not designated as a hedge The spot rates were as follows October 11 C$1 $ 0 735 November 10 C$1 $ 0 732 Prepare journal entries to record Texs foreign sales of its products, use of forward contracts, and settlements of the receivables (If no entry is required for a transaction event, select No journal entry required in the first account field )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 15, 2024

Tex Hardware sells many of its products overseas. The following are some selected transactions. Tex sold electronic subassemblies to a firm in Denmark for 150,000

Tex Hardware sells many of its products overseas. The following are some selected transactions.

Tex sold electronic subassemblies to a firm in Denmark for 150,000 Danish kroner (Dkr) on June 6, when the exchange rate was Dkr 1 = $0.1775. Collection was made on July 3 when the rate was Dkr 1 = $0.1778.
On July 22, Tex sold copper fittings to a company in London for 34,000 with payment due on September 20. Also, on July 22, Tex entered into a 60-day forward contract to sell 34,000 at a forward rate of 1 = $1.630. The forward contract is not designated as a hedge. The spot rates follow:


July 22	1	=	$	1.580
September 20	1	=	$	1.612

Tex sold storage devices to a Canadian firm for C$79,000 (Canadian dollars) on October 11, with payment due on November 10. On October 11, Tex entered into a 30-day forward contract to sell Canadian dollars at a forward rate of C$1 = $0.730. The forward contract is not designated as a hedge. The spot rates were as follows:


October 11	C$1	=	$	0.735
November 10	C$1	=	$	0.732

Prepare journal entries to record Texs foreign sales of its products, use of forward contracts, and settlements of the receivables. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)