Questions from Advanced Accounting

Q: Criticize the following statement: “Exchange losses arise from foreign import

Criticize the following statement: “Exchange losses arise from foreign import activities, and exchange gains arise from foreign export activities.”

Q: Assume that one euro can be exchanged for 1.20 U

Assume that one euro can be exchanged for 1.20 U.S. dollars. What is the exchange rate if the exchange rate is quoted directly? Indirectly?

Q: Wil has 100,000 units of widgets in its inventory on

Wil has 100,000 units of widgets in its inventory on October 1, 2016. Wil purchased them for $1 per unit one month ago. It hedges the value of the widgets by entering into a forward contract to sell 1...

Q: On December 12, 2016, Car entered into three forward exchange

On December 12, 2016, Car entered into three forward exchange contracts, each to purchase 100,000 Canadian dollars in 90 days. Assume a 12 percent interest rate. The relevant exchange rates are as fol...

Q: On April 1, 2016, Win of Canada ordered customized fittings

On April 1, 2016, Win of Canada ordered customized fittings from Ace, a U.S. firm, to be delivered on May 31, 2016, at a price of 50,000 Canadian dollars. The spot rate for Canadian dollars on April 1...

Q: On November 2, 2016, Baz, a U.S

On November 2, 2016, Baz, a U.S. retailer, ordered merchandise from Mat of Japan. The merchandise is to be delivered to Baz on January 31, 2017, at a price of 1,000,000 yen. Also on November 2, Baz he...

Q: On December 1, 2016, Jol Company enters into a 90

On December 1, 2016, Jol Company enters into a 90-day forward contract with a rice speculator to purchase 500 tons of rice at $1,000 per ton. Jol enters into this contract in order to hedge an anticip...

Q: Pin Corporation acquired a 90 percent interest in Sun Corporation for $

Pin Corporation acquired a 90 percent interest in Sun Corporation for $360,000 cash on January 2, 2014, when Sun had capital stock of $200,000 and retained earnings of $150,000. Sun purchased its 10 p...

Q: Refer to Exercise E 13-1 and assume that Jol enters

Refer to Exercise E 13-1 and assume that Jol enters into the forward contract to hedge a firm purchase commitment. Repeat parts 1 and 2 under this assumption. Data from Exercise E 13-1 On December 1...

Q: Brk signs a firm sales commitment with Riv. The contract is

Brk signs a firm sales commitment with Riv. The contract is to sell 100,000 widgets deliverable in three months, on January 31, 2017, at the prevailing market price of widgets at that date. On Novembe...