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Exam 12: Accounting for Foreign Currency Transactions

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Exam 1: Introduction to Business Combinations and the Conceptual Framework29 Questionsadd course
Exam 2: Accounting for Business Combinations36 Questionsadd course
Exam 3: Consolidated Financial Statementsdate of Acquisition34 Questionsadd course
Exam 4: Consolidated Financial Statements After Acquisition44 Questionsadd course
Exam 5: Allocation and Depreciation of Differences Between Implied and Book Value35 Questionsadd course
Exam 6: Elimination of Unrealized Profit on Intercompany Sales of Inventory40 Questionsadd course
Exam 7: Elimination of Unrealized Gains or Losses on Intercompany Sales of Property and Equipment42 Questionsadd course
Exam 8: Changes in Ownership Interest27 Questionsadd course
Exam 9: Intercompany Bond Holdings and Miscellaneous44 Questionsadd course
Exam 10: Insolvency Liquidation and Reorganization31 Questionsadd course
Exam 11: International Financial Reporting Standards38 Questionsadd course
Exam 12: Accounting for Foreign Currency Transactions25 Questionsadd course
Exam 13: The Translation of Financial Statements of Foreign Affiliates38 Questionsadd course
Exam 14: Reporting for Segments and for Interim Financial Periods57 Questionsadd course
Exam 15: Partnerships: Formation, Operation, and Ownership Changes47 Questionsadd course
Exam 16: Partnership Liquidation45 Questionsadd course
Exam 17: Introduction to Fund Accounting36 Questionsadd course
Exam 18: Introduction to Accounting for State and Local Governmental Units25 Questionsadd course
Exam 19: Accounting for Nongovernment Nonbusiness Organizations:33 Questionsadd course
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On November 1, 2014, American Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of $450,000 foreign currency units (FCU).On November 1, American also entered into a forward contract to hedge the exposed asset.The forward rate is $0.70 per unit of foreign currency.American has a December 31 fiscal year-end.Spot rates on relevant dates were: On November 1, 2014, American Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of $450,000 foreign currency units (FCU).On November 1, American also entered into a forward contract to hedge the exposed asset.The forward rate is $0.70 per unit of foreign currency.American has a December 31 fiscal year-end.Spot rates on relevant dates were: What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment? What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment? On November 1, 2014, American Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of $450,000 foreign currency units (FCU).On November 1, American also entered into a forward contract to hedge the exposed asset.The forward rate is $0.70 per unit of foreign currency.American has a December 31 fiscal year-end.Spot rates on relevant dates were: What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment?

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Question 21

A transaction gain or loss is reported currently in the determination of income if the purpose of the forward contract is to:

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Question 22

On April 1, 2014, Manatee Company entered into two forward exchange contracts to purchase 300,000 euros each in 90 days.The relevant exchange rates are as follows: On April 1, 2014, Manatee Company entered into two forward exchange contracts to purchase 300,000 euros each in 90 days.The relevant exchange rates are as follows: The first forward contract was to hedge a purchase of inventory on April 1, payable on December 1.On April 30, what amount of foreign currency transaction loss should Manatee report in income? The first forward contract was to hedge a purchase of inventory on April 1, payable on December 1.On April 30, what amount of foreign currency transaction loss should Manatee report in income?

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Question 23

On November 1, 2014, National Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of 200,000 foreign currency units (FCU).On November 1, National also entered into a forward contract to hedge the exposed asset.The forward rate is $0.80 per unit of foreign currency.National has a December 31 fiscal year-end.Spot rates on relevant dates were: On November 1, 2014, National Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of 200,000 foreign currency units (FCU).On November 1, National also entered into a forward contract to hedge the exposed asset.The forward rate is $0.80 per unit of foreign currency.National has a December 31 fiscal year-end.Spot rates on relevant dates were: What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment? What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment? On November 1, 2014, National Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of 200,000 foreign currency units (FCU).On November 1, National also entered into a forward contract to hedge the exposed asset.The forward rate is $0.80 per unit of foreign currency.National has a December 31 fiscal year-end.Spot rates on relevant dates were: What will be the adjusted balance in the Accounts Receivable account on December 31, and how much gain or loss was recorded as a result of the adjustment?

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Question 24

On November 1, 2014, Cone Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of 250,000 foreign currency units (FCU).On November 1, Cone also entered into a forward contract to hedge the exposed asset.The forward rate is $0.90 per unit of foreign currency.Cone has a December 31 fiscal year-end.Spot rates on relevant dates were: On November 1, 2014, Cone Company sold inventory to a foreign customer.The account will be settled on March 1 with the receipt of 250,000 foreign currency units (FCU).On November 1, Cone also entered into a forward contract to hedge the exposed asset.The forward rate is $0.90 per unit of foreign currency.Cone has a December 31 fiscal year-end.Spot rates on relevant dates were:

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