Carl Inc. purchased inventory on September 12, 2017 from a foreign customer for 750,000 units of...

 

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Carl Inc. purchased inventory on September 12, 2017 from a foreign customer for 750,000 units of foreign currency (FC) due on January 12, 2018. Simultaneously, the company entered into a forward contract for 750,000 units of FC for delivery on January 12, 2018 at the forward rate of $1.03. Payment was made to the foreign customer on January 12, 2018. The company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Spot Rate (Delivery on 1/12/2018) Date 9/12/2017 1.01 1.03 12/31/2017 1.08 1.09 1/12/2018 1.05 Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one thusand is 1.000, not 100O. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign. 2. if no entry is required, write N/A 3. Only use the following accounts: Inventory, A/P (FC), A/R (FC), Cash, Sales, CGS, Exchange G/L, Fwd Contract, Contract G/L, Contract G/L (OCI), Firm CMMT, CMMT G/L 4. Copy account names accurately to receive credits, names are not case sensitive. 5. Remember: do ALL buy/sell transaction entries first, then financing management entries later. Carl Inc. purchased inventory on September 12, 2017 from a foreign customer for 750,000 units of foreign currency (FC) due on January 12, 2018. Simultaneously, the company entered into a forward contract for 750,000 units of FC for delivery on January 12, 2018 at the forward rate of $1.03. Payment was made to the foreign customer on January 12, 2018. The company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Spot Rate (Delivery on 1/12/2018) Date 9/12/2017 1.01 1.03 12/31/2017 1.08 1.09 1/12/2018 1.05 Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one thusand is 1.000, not 100O. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign. 2. if no entry is required, write N/A 3. Only use the following accounts: Inventory, A/P (FC), A/R (FC), Cash, Sales, CGS, Exchange G/L, Fwd Contract, Contract G/L, Contract G/L (OCI), Firm CMMT, CMMT G/L 4. Copy account names accurately to receive credits, names are not case sensitive. 5. Remember: do ALL buy/sell transaction entries first, then financing management entries later.

Answer rating: 100% (QA)

Journal entry Purchased inventory for 750000 101 757500 September 12 2017 Inventory 757500 AP FC 757... View the full answer