On December 20, 2023, Momeler Company (a U.S.-based company) sold parts to a foreign customer at a price of 195,000 rials.Payment is received on January 10, 2024. Currency exchange rates are as follows:DateDecember 20, 2023December 31, 2023January 10, 2024U.S. Dollarper Rial.a. The rial receivableexchangeb. The nial receivableexchange$1.291.261.22Required:a. How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeler's 2023 income statement?b. How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement?in U.S. dollar value, resulting in a foreignofin 2023in U.S. dollar value, resulting in a foreignofin 2024

Foreign currency transaction accounting involves recording transactions in a company's financial…

Answered: a. The rial receivable exchange b. The…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter10: Measuring Exposure To Exchange Rate Fluctuations

Section: Chapter Questions

Problem 1IEE

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On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.
On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 175,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date U.S. Dollar per Rial December 20, 2020 $ 1.27 December 31, 2020 1.24 January 10, 2021 1.20 How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2020 income statement?
On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 45,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date U.S. Dollar per Rial December 20, 2020 $ 1.14 December 31, 2020 1.11 January 10, 2021 1.07 How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2020 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier’s 2021 income statement?
Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2023. for 100,000 crowns. It paid the foreign currency account payable on January 15, 2024. The following exchange rates are relevant: Date November 1, 2023 December 31, 2023 January 15, 2024 a. The Required: a. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento's 2023 income statement? b. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento's 2024 income statement? b. The U.S. Dollar per Crown foreign exchange $ 0.754 0.742 0.747 in the dollar value of the crown payable is recorded as in 2023. foreign exchange in the dollar value of the crown payable is recorded as in 2024.
Foreign currency transactions Use the following information for the next two questions: On December 1, 20x1, Entity A sells good to Entity B, on credit, for a total sale price of $1,000. Entity B settles the account on January 6, 20x1. Entity A's functional currency is the Philippine peso (P). The relevant exchange rate are as follows: Dec. 1, 20x1 Dec. 31, 20x1 Jan. 6, 20x1 P50:$1 P52:$1 P41:$1 How much is the foreign exchange gain (loss) to be recognized by Entity A on December 31, 20x1?
On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows: December 20, 2017 $1.05December 31, 2017 1.02January 10, 2018 0.98a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?
Brandt Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2020, with payment of 10 million South Korean won to be received on March 31, 2021. The following exchange rates apply: Date Spot Rate Forward Rate(to March 31, 2021) December 1, 2020 $ 0.0035 $ 0.0034 December 31, 2020 0.0033 0.0032 March 31, 2021 0.0038 N/A 1. Assuming that Brandt did not hedge his foreign exchange risk, how much foreign exchange gain or loss should it report on its 2020 income statement with regard to this transaction? a. 3000 gain b. 2000 loss c. 5000 gain d. 1000 loss 2. Assuming that Brandt entered into a forward contract to sell 10 million South Korean won on December 1, 2020, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2020 resulting from a fluctuation in the value of the won? Brandt amortizes forward points on a monthly basis using a straight-line method. Ignore…
Honesty Company sold goods on account to a foreign company for 80,200 euros on October 20, 2022. The date of invoice is October 25, 2022 and the payment is due on January 29, 2023. Exchange rates were as follows (see image below). Answer the following subquestion(3): a. How much is the foreign exchange gain (loss) to be reported in 2022? ____________ thanks!
On July 1, 2020, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2021. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows: LO 9-2 LO 9-2 LO 9-2 LO 9-2, 9-3 Problems 1. Which of the following combinations correctly describes the relationship between foreign currency transactions, exchange rate changes, and foreign exchange gains and losses? LO 9-1 Type of Transaction Foreign Currency Foreign Exchange Gain or Loss a. Export sale Appreciates Loss b. Import purchase Appreciates Gain c. Import purchase Depreciates Gain d. Export sale Depreciates Gain Date Amount July 1, 2020 (date borrowed). . . . . . . . . . . . . . . . . . . . . . . . . $225,000 December 31, 2020 (Mifflin’s year-end). . . . . . . . . . . . . . . . 220,000 July 1, 2021 (date repaid). . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,000 In its 2021 income statement, what amount should Mifflin include as a…
FinnCo purchases goods from its Mexican supplier on 1 November 20X1; the purchaseprice is 100,000 Mexican pesos. Credit terms allow payment in 45 days, and FinnComakes payment of 100,000 pesos on 15 December 20X1. FinnCo’s functional and presentation currency is the euro. Spot exchange rates between the euro (EUR) and Mexican peso (MXN) are as follows:1 November 20X1 MXN1 = EUR0.068415 December 20X1 MXN1 = EUR0.0703FinnCo’s fi scal year end is 31 December. How will FinnCo account for this foreign currency transaction, and what eff ect will it have on the 20X1 fi nancial statements?
Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2020, for 100,000 crowns. It paid the foreign currency account payable on January 15, 2021. The following exchange rates are relevant: Date U.S. Dollar per Crown November 1, 2020 $ 0.754 December 31, 2020 $ 0.742 January 15, 2021 $ 0.747 How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income statement? How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2021 income statement?
Problem 9-24 (Algo) (LO 9-2) On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 145,000 rials. Payment is received on January 10, 2021. Currency exchange rates are as follows: Date December 20, 2020 December 31, 2020 January 10, 2021 U.S. Dollar per Rial $ a. The rial receivable exchange b. The rial receivable exchange 1.24 1.21 1.17 a. How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2020 income statement? b. How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2021 income statement? in U.S. dollar value, resulting in a foreign of in 2020. in U.S. dollar value, resulting in a foreign of in 2021

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a. The rial receivable exchange b. The nial receivable exchange in U.S. dollar value, resulting in a foreign of in 2023 in U.S. dollar value, resulting in a foreign of in 2024