Reference no: EM131533080
Assignment
Eximco Corporation (based in Champaign, Illinois) has a number of transactions with companies in the country of Mongagua, where the currency is the mong. On November 30, 2015, Eximco sold equipment at a price of 500,000 mongs to a Mongaguan customer that will make payment on January 31, 2016. In addition, on November 30, 2015, Eximco purchased raw materials from a Mongaguan supplier at a price of 300,000 mongs; it will make payment on January 31, 2016. To hedge its net exposure in mongs, Eximco entered into a two-month forward contract on November 30, 2015, to deliver 200,000 mongs to the foreign currency broker in exchange for $104,000. Eximco properly designates its forward contract as a fair value hedge of a foreign currency receivable. The following rates for the mong apply:
|
Date
|
Spot Rate
|
Forward Rate
(to January 31, 2016)
|
|
November 30, 2015
|
$0.53
|
$0.52
|
|
December 31, 2015
|
0.50
|
0.48
|
|
January 31, 2016
|
0.49
|
N/A
|
Eximco's incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901.
a. Prepare all journal entries, including December 31 adjusting entries, to record these transactions and the forward contract. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
b. What is the impact on net income in 2015? (In case of negative impact on net income, answer should be entered with a minus sign.)
c. What is the impact on net income in 2016? (In case of negative impact on net income, answer should be entered with a minus sign.)
|
Prepare the income statement for the company
: L'Oréal reports the following income statement accounts for the year ended December 31, 2009 (euros in millions).
|
|
Project is expected to provide a positive cash flow
: If the wacc = 8%, what is the NPV for the project? At what interest rate, would NPV equal 0?
|
|
Obtain industry averages for commonly used ratios
: The purpose of the third part of the comprehensive project is to use resources available to obtain industry averages for commonly used ratios.
|
|
Prepare journal entries to record merchandising transactions
: Exercise: Journalize the following merchandising transactions for CSI Systems assuming it uses a perpetual inventory system.
|
|
Prepare all journal entries
: Prepare all journal entries, including December 31 adjusting entries, to record these transactions and the forward contract.
|
|
Need a compare and contrast essay of the topic instagram
: Need a compare and contrast essay of the topic instagram and facebook, go into detail about the history of both, and the usuasge etc
|
|
How much money was left on the table
: Price per share at the end of the first day is $16.50. The current price is $20. How much money was left on the table?
|
|
Expected cash inflows
: Project K costs $60,000, its expected cash inflows are $15,000 per year for 7 years, What is the project's NPV?
|
|
Financial statements for microsoft corporation
: At this point I've examined three years of financial statements for Microsoft Corporation. I've have also determined their sustainable growth rate as well.
|