Zenith Corporation is considering engaging in transactions with digital assets

(cryptocurrencies) to facilitate various transactions with customers and vendors in a

developing country whose political climate has greatly affected the stability and

credibility of the countrys banking system and currency valuation.

Zenith has no experience with digital assets. Assume you are the CFO for Zenith, and

the Board of Directors has asked you give a presentation on the suitability of engaging

in digital asset transactions for commercial activities and for diversification of the

companys asset base.

Prepare a Power Point presentation that you would have accompany an oral

presentation that includes but is not limited to the following:

Business rationalization for engaging in cryptocurrency transactions

Risks and rewards

Accounting treatment and potential impact on the financial statements (reference

authoritative guidance) with illustrative examples for each of the following

scenarios:

1.

A sales contract is negotiated with the selling price being 10 Bitcoin

(which will be received at the time of the sale when the market price

per Bitcoin is $50,000)

2.

Same terms as above except the payment of Bitcoin is due 2

months after the sales date. Assume two scenarios

a)

the price per

bitcoin is $40,000 two months after the sale and

b)

the price of

bitcoin is $60,000 two months after the sale.

3.

The company purchases 10 Bitcoin to hold indefinitely to diversify

the balance sheet or for an unspecified future use. Assume the

purchase price is $50,000 per bitcoin and at the financial reporting

date the value of Bitcoin has hypothetically changed to either

$40,000 or $60,000