On November 2, 2011, Baz, a U.S. retailer, ordered merchandise

On November 2, 2011, Baz, a U.S. retailer, ordered merchandise from Mat of Japan. The merchandise is to be delivered to Baz on January 30, 2012, at a price of 1,000,000 yen. Also on November 2, Import Baz hedged the foreign currency commitment with Mat by contracting with its exchange broker to buy 1,000,000 yen for delivery on January 30, 2012. Exchange rates for yen are:


11/2/11 $0.0075 12/31/11 1/30/12 $0.0076 0.0078 0.0079 $0.0078 0.0079 Spot rate 30-day forward rate 90-day forward rate


REQUIRED
1. Prepare the entry (or entries) on Baz's books on November 2, 2011.
2. Prepare the adjusting entry on December 31,2011.

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...

Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members

Get help from Accounting Tutors
Ask questions directly from Qualified Online Accounting Tutors .
Best for online homework assistance.