On June 1, Year 3, Forever Young Corp. (FYC) ordered merchandise from a supplier in Turkey for
Question:
On September 30, Year 3, FYC paid the foreign supplier in full and settled the forward contract.
Exchange rates were as follows:
Required:
(a) (i) Prepare all journal entries required to record the transactions described above.
(ii) Prepare a June 30, Year 3, partial trial balance of the accounts used in Part (i), and indicate how each account would appear in the year-end financial statements.
(b) Prepare all necessary journal entries under the assumption that no forward contract was entered.
(c) Prepare all necessary journal entries to record the transactions described above, assuming that the forward contract was designated as a fair value hedge.
(d) Assume that Carleton is a private company and uses ASPE for reporting purposes. Prepare all necessary journal entries to record the transactions described in the body of the question above.
(e) Which of the above reporting methods would present the highest current ratio at September 30, Year 3? Briefly explain.
Step by Step Answer:
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell