User Account

All Pages

Compute the foreign exchange gain or loss to be reported

Assignment Help Accounting Basics
Reference no: EM132726413

Roundtree Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2011 and 2012.

2011

  1. Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $7,938 cash. The exchange rate for pesos is $0.1323 on this day.
  2. July 21 Sold merchandise on credit to Sumito Corp. in Japan. The price of 1.5 million yen is to be paid 120 days from the date of sale. The exchange rate for yen is $0.0096 on this day.
  3. Oct. 14 Sold merchandise for 19,000 pounds to Smithers Ltd. of Great Britain, payment in full to be received in 90 days. The exchange rate for pounds is $1.5181 on this day.
  4. Nov. 18 Received Sumito's payment in yen for its July 21 purchase and immediately exchanged the yen for dollars. The exchange rate for yen is $0.0091 on this day. 
  5. Dec. 20 Sold merchandise for 17,000 ringgits to Hamid Albar of Malaysia, payment in full to be received in 30 days. On this day, the exchange rate for ringgits is $0.6852.
  6. Dec. 31 Recorded adjusting entries to recognize exchange gains or losses on Roundtree's annual financial statements.

Rates for exchanging foreign currencies on this day follow.

Pesos (Mexico) . . . . . . . . . . $0.1335
Yen (Japan) . . . . . . . . . . . . . . 0.0095
Pounds (Britain) . . . . . . . . . 1.5235
Ringgits (Malaysia) . . . . . . . . 0.6807

2012

  1. Jan. 12 Received full payment in pounds from Smithers for the October 14 sale and immediately exchanged the pounds for dollars. The exchange rate for pounds is $1.5314 on this day.
  2. Jan. 19 Received Hamid Albar's full payment in ringgits for the December 20 sale and immediately exchanged the ringgits for dollars. The exchange rate for ringgits is $0.6771 on this day.

Required

Problem 1. Prepare journal entries for the Roundtree transactions and adjusting entries (round amounts to the nearest dollar).

Problem 2. Compute the foreign exchange gain or loss to be reported on Roundtree's 2011 income statement. Analysis Component

Problem 3. What actions might Roundtree consider to reduce its risk of foreign exchange gains or losses?

Reference no: EM132726413

Questions Cloud

Find yield to maturity on bond-saleemi? corporation : The Saleemi? Corporation's ?$1,000 bonds pay 6 percent interest annually and have 9 years until maturity. You can purchase the bond for ?$895.
Determine the net income for tax purposes and taxable income : Determine the 2019 net income for tax purposes and taxable income for Zarish. Briefly discuss the tax consequences regarding the Applesoft shares
Compute avoidable interest for pharoah company : Pharoah Company, Compute avoidable interest for Pharoah Company. Use the weighted-average interest rate for interest capitalization purposes.
Explain goals and operations for an organization : 1. Summarize and comments on these topics and how they relate to the goals and operations for an organization.
Compute the foreign exchange gain or loss to be reported : Roundtree Company, Compute the foreign exchange gain or loss to be reported on Roundtree's 2011 income statement. Analysis Component
Define forest in the context of graph theory : Define Forest in the context of graph theory and Find the preorder search output of the following binary tree, where a=15, b=6, c=1 6, d=9, e=21.
What is the break-even growth rate : -The firm has experienced difficulty estimating the growth rate, therefore what is the break-even growth rate that would provide and NPV of 0?
How do account for the different options : Your boss is concerned about cash flow. What are some options available to you, and how do you account for these different options?
Compute what is the expected return on the share : A share has a beta of 1.2. The risk-free rate of return is 2.0% and the expected return on the market is 11.9%. What is the expected return on the share?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd