Accounting for foreign currency

Assignment Help Financial Accounting

Reference no: EM13936454

Accounting for foreign currency-denominated [receivables and payables-multiple years

The accounts of Lincoln International, a U.S. corporation, show $81,300 accounts receivable and $38,900 accounts payable at December 31, 2008, before adjusting entries are made. An analysis of the balances reveals the following:

Accounts Receivable

Receivable denominated in U.S. dollars $28,500

Receivable denominated in 20,000 Swedish krona 11,800

Receivable denominated in 25,000 British pounds 41,000

Total $81,300

Accounts Payable

Payable denominated in U.S. dollars $ 6,850

Payable denominated in 10,000 Canadian dollars 7,600

Payable denominated in 15,000 British pounds 24,450

Total $38,900

Current exchange rates for Swedish krona, British pounds, and Canadian dollars at December 3 1, 2006, are $0.66, $1.65, and $0.70, respectively.

REQUIRED with calculation:

1. Determine the net exchange gain or loss that should be reflected in Lincoln's income statement for 2008 from year-end exchange adjustments.

2. Determine the amounts at which the accounts receivable and accounts payable should be included in Lincoln's December 31, 2008, balance sheet.

3. Prepare journal entries to record collection of the receivables in 2009 when the spot rates for Swedish krona and British pounds are $0.67 and $1.63, respectively.

4. Prepare journal entries to record settlement of accounts payable in 2009 when the spot rates for Canadian dollars and British pounds are $0.71 and $1.62, respectively.

Reference no: EM13936454

Questions Cloud

Development of the system using a waterfall model : Describe the steps that will be undertaken during the development of the system using a waterfall model

Explain importance of aligning financial management process : Identify the improvement opportunity in this case and your recommendations for process improvements to ensure the effectiveness, efficiency and reliability of the process. You need to monitor your team's ability to cope with the processes.

Enveloped viruses are released from the host cell by : Detergent antiseptics inactivate viruses by, Rubeola is a dangerous disease in pregnant women because the virus is transmitted from mother to child during childbirth.

Identify the major steps in system development : Identify the major steps in system development, The discussion assignment for this week includes a review of the Key Assignment Outline completed by one of your classmates, as well as a substantial response to at least one other student

Accounting for foreign currency : Accounting for foreign currency-denominated [receivables and payables-multiple years.

What is the estimate key rate duration : What is the estimate for the 30-year key rate duration for this five-year bond assuming a 1bp increase in rates across the term structure?

Define each of the following mis tps dss and ai : Information systems typically support different work models. You have been asked to create a report on what work models exist, and which model is most applicable to your organization. Include the following information in your report: Define each o..

How the information systems you have chosen for organization : Talk about how the information systems you have chosen for your organization can be used to transform data into information, and information into knowledge

Describe wi-fi and telecommuting : Describe Wi-Fi and telecommuting. What are the issues associated with allowing this technology to access the organization's network? Do you see either as being applicable for your selected organization

User Account

All Pages