Datamix, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2011

Question:

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

2011
May 26 Sold merchandise for 6.5 million yen to Fuji Company of Japan, payment in full to be received in 60 days. On this day, the for yen is $0.0094.
June 1 Sold merchandise to Fordham Ltd. of Great Britain for $72,613 cash. The for pounds is $1.5277 on this day.
July 25 Received Fuji’s payment in yen for its May 26 purchase and immediately exchanged the yen for dollars. The for yen is $0.0090 on this day.
Oct. 15 Sold merchandise on credit to Martinez Brothers of Mexico. The price of 373,000 pesos is to be paid 90 days from the date of sale. On this day, the for pesos is $0.1340.
Dec. 6 Sold merchandise for 242,000 yuans to Chi-Ying Company of China, payment in full to be received in 30 days. The for yuans is $0.1975 on this day.
Dec. 31 Recorded adjusting entries to recognize exchange gains or losses on Datamix’s annual financial statements. Rates of exchanging foreign currencies on this day follow.
Yen (Japan) . . . . . . . . . . . . $0.0094
Pounds (Britain) . . . . . . . . 1.5318
Pesos (Mexico) . . . . . . . . . 0.1560
Yuans (China) . . . . . . . . . . 0.2000

2012
Jan. 5 Received Chi-Ying’s full payment in yuans for the December 6 sale and immediately exchanged the yuans for dollars. The for yuans is $0.2060 on this day.
Jan. 13 Received full payment in pesos from Martinez for the October 15 sale and immediately exchanged the pesos for dollars. The for pesos is $0.1420 on this day.

Required
1. Prepare journal entries for the Datamix transactions and adjusting entries.
2. Compute the foreign exchange gain or loss to be reported on Datamix’s 2011 income statement.
Analysis Component
3. What actions might Datamix consider to reduce its risk of foreign exchange gains or losses?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...