Reference no: EM133146748
Questions -
Q1. IMPEXP Co., a Canadian company, received inventory from a U.S. supplier and was invoiced for US$200,000 on December 18, 2016. IMPEXP paid the account on January 15, 2017.
IMPEXP's year end is December 31. Relevant exchange rates are as follows: December 18, 2016 US$1.00 = C$1.10 December 31, 2016 US$1.00 = C$1.13 January 15, 2017 US$1.00 = C$1.12
Required - Prepare the journal entry to record the purchase of the inventory.5n6 b) Prepare the journal entry for any adjustments required at year end
Q2. Imptex Co., a Canadian company, received inventory from a U.S. supplier and was invoiced for US$150,000 on December 28, 2016. IMPEXP paid the account on January 30, 2017. IMPEXP's year end is December 31. Relevant exchange rates are as follows: December 28, 2016 US$1.00 = C$1.12 December 31, 2016 US$1.00 = C$1.15 January 30, 2017 US$1.00 = C$1.14
Required - Prepare the journal entry to record the purchase of the inventory. b) Prepare the journal entry for any adjustments required at year end.
Q3. ForEx Inc, purchased an inventory from an overseas supplier and was invoiced for US$750,000 on December 02, 2018. IMPEXP paid the account on February 19, 2019. IMPEXP's year end is December 31. Relevant exchange rates are as follows: December 02, 2018 US$1.00 = C$1.30 December 31, 2018 US$1.00 = C$1.28 February 19, 2019 US$1.00 = C$1.27
Required - Prepare the journal entry to record the purchase of the inventory. b) Prepare the journal entry for any adjustments required at year end?
Q4. On March 1, 2018, Jones Inc., a Canadian publicly traded company, ordered some used equipment from a company in Germany for €100,000. The equipment's useful life is five years, and it is depreciated using the straight-line method with a residual value of $20,000. The equipment was delivered on April 1, 2018, and the invoice called for payment to be made on June 30, 2018. On April 1, 20X8, Jones entered into a forward contract with a bank to hedge the accounts payable by agreeing to buy €100,000 on June 30, 2018, at an exchange rate of €1 = C$1.79. On June 30, 2018, Jones settled the forward contract and paid the supplier. Jones has a June 30 year end. Spot rates were as follows: April 1, 2018 €1 = C$1.70 June 30, 2018 €1 = C$1.75.
Assuming that this is Jones' only foreign currency transaction during the year, what is the total foreign exchange loss/gain recognized on the statement of comprehensive income for the year ended June 30, 2018?
Q5. On January 1, 20X6, Bold Inc., a Canadian company, borrowed ¥100,000,000 from a Japanese bank. Interest is payable at 10% on December 31 each year, which coincides with Stephanie's year end. The exchange rate information is as follows: January 1, 2016 ¥1 = C$0.0110 December 31, 2016 ¥1 = C$0.0095 Average for 2016 ¥1 = C$0.0100 January 1, 2017 ¥1 = C$0.0095 December 31, 2017 ¥1 = C$0.0120.