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thats all the information Part III(20 pts) On September 18, 2019, when the selling spot rate for a foreign country's local currency unit (LCU) was
thats all the information
Part III(20 pts) On September 18, 2019, when the selling spot rate for a foreign country's local currency unit (LCU) was LCUL - S0.18, Grate Company acquired a 30-day forward contract for LCU250,000 at the forward rate of LCU1 = $0.21. The contract was not designated as a hedge. On October 18, 2019, when Grate paid the forward contract and received the LCUs, the selling spot rate was LCU1 = $0.23. Prepare journal entries (omit explanations) for Grate Company on September 18 and October 18, 2019. Part IV(25 pts) Flannery Industries, a U.S. multinational enterprise that prepares annual financial statements, received merchandise on March 8, 2019, from a Finnish supplier at a cost of 500,000 markkas (Fmk). Flannery acquired a draft on April 7, 2019, in the amount of Fmk500,000 for mailing to the Finnish supplier. Spot rates for the markka on the two dates were as follows: Buying Rates Selling Rates March 8, 2019 Fmkl= $0.2022 Fmkl - $0.2198 April 7, 2019 Fmkl-.2145 Fmkl - 50.2321 Prepare journal entries for Flannery on March 8 and April 7, 2019. Part V(25 pts) On August 1, 2019, Minter Company sold merchandise with a cost of $120,000 to a foreign customer in its local currency unit (LCU) for a LCU650,000, 90-day promissory note bearing interest of 15% a year. On October 31, 2019, Minter received a draft for $662,000, in settlement of the note receivable from a foreign customer, and converted it to U.S. dollars immediately. Relevant exchange rates for the LCU were as follows: LCU1 Aug 1, 2019 Oct 31, 2019 Buying spot rate $0.30 Selling spot rate 0.32 0.34 30-day forward rate 0.42 $0.32 0.45 Prepare journal entries for Minter Company on August 1, 2019 and October 31, 2019, for the foregoing information. Minter uses the periodic inventory system and prepares end-of-period adjustments only on December 31st Step by Step Solution
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