Question

Globe Shipping, a U.S. company, is an importer and exporter. The following are some transactions with foreign companies.
1. Globe sold blue jeans to a South Korean importer on January 15 for $7,400, when the exchange rate was South Korean won (KRW)1 = $0.185. Collection, in dollars, was made on March 15, when the exchange rate was $0.180.
2. On March 8, Globe purchased woolen goods from Ireland for €7,000. The exchange rate was €1 = $0.622 on March 8, but the rate was $0.610 when payment was made on May 1.
3. On May 12, Globe signed a contract to purchase toys made in Taiwan for 80,000 Taiwan dollars (NT$). The toys were to be delivered 80 days later on August 1, and payment was due on September 9, which was 40 days after delivery. On May 12, Globe also entered into a 120-day undesignated forward contract to buy NT$80,000 at a forward rate of NT$1 = $0.0376. On August 1, the forward rate for a September 9 exchange is NT$1 = $0.0378. The spot rates were as follows:
May 12 ........... NT$1 = $0.0370
August 1.......... NT$1 = 0.0375
September 9 ......... NT$1 = 0.0372
4. Globe sold microcomputers to a German enterprise on June 6 for €150,000. Payment was due in 90 days on September 4. On July 6, Globe entered into a 60-day undesignated forward contract to sell €150,000 at a forward rate of €1 = $0.580. The spot rates follow:
June 6........... €1 = $0.600
July 6 ........... €1 = 0.590
September 4....... €1 = 0.585

Required
Prepare all necessary journal entries for Globe to account for the foreign transactions, including the sales and purchases of inventory, forward contracts, and settlements.



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  • CreatedMay 23, 2014
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