Choy Co. purchased rice from China for 150,000 renminbi (r) on Nov. 1, 2015. Payment is due

Fantastic news! We've Found the answer you've been seeking!

Question:

Choy Co. purchased rice from China for 150,000 renminbi (r) on Nov. 1, 2015. Payment is due on Jan. 30, 2016. Choy also entered into a 90 day forward contract with an exchange broker to purchase 150,000 renmimbi. The rates were as follows:

Date Spot Rate Forward Rate

Nov. 1, 2015 $0.120 $0.126 – 90 days

Dec. 31, 2015 $0.124 $0.129 – 30 days

Jan. 30, 2016 $0.127

a) Record all journal entries on the transaction, balance sheet and settlement dates. Show computations.

b) What is Choy’s overall gain or loss from these transactions? Show computations.

Related Book For answer-question

Fundamentals of Advanced Accounting

ISBN: 978-0077667061

5th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

See More Books

Posted Date: May 25, 2021 12:01 AM

See More Questions

According to ISA 315, the auditor should obtain an understanding of the entity and its environment sufficient to identify and assess the level of audit risk Required: Explain the meaning of audit...
Mr. Fox has just bought an old apartment for $1,000,000. Mr. Fox plans to rent out the apartment. The apartment in its current condition can be rented out for $3,500 at the end of each month forever....
On October 1, 2011, Hanks Company entered into a forward contract to sell 100,000 LCUs in four months (on January 31, 2012) and receive $65,000 in U.S. dollars. Exchange rates for the LCU follow:...
The Justice Department has been asked to review a merger request for a market with the following four firms. Firm Assets A .......... $156 million B .......... 130 million C .......... 45 million D...
The IRS is disputing a deduction reported on your Year 1 tax return, which you filed on April 12 of Year 2. On April 4 of Year 5, the IRS audit agent asks you to waive the statute of limitations for...
Give formulas for the following. a. Potassium terrachlorocobaltate(II) b. Aquatricarbonylplatinum(II) bromide c. Sodium dicyanobis(oxalato)ferrate(DI) d. Triamminechloroethylenediaminechromium(III)...
Plaintiff purchases a new car that has defects in its paint job. Three times the dealership repaints the care, but to no avail. The plaintiff continues to drive the car as he has no other option in...
Your best friend just received a gift of $7,000 from his favorite aunt. He wants to save the money to use as starter money after college. He can invest it (1) risk-free at 6%, (2) taking on moderate...
Alice wants to buy apples, beets, and carrots. An apple, a beet, and a carrot cost 16 dollars, two apples and three beets cost 23 dollars, and one apple, two beets, and three carrots cost 35 dollars....
Two mining companies, Red and Blue, bid for the right to drill a field. The possible bids are $ 15 Million, $ 25 Million, $ 35 Million, $ 45 Million and $ 50 Million. The winner is the company with...
The copper sphere shown above carries a charge of +5,0 C. How much work must be done to bring an additional charge of +10,0 nC from point P to the surface of the sphere?
What are the feedback mechanisms and tipping points that regulate ecosystem stability, regime shifts, and resilience in the face of global environmental changes, such as climate change, land use...
What are the structural and functional implications of enzyme conformational dynamics, including protein folding, domain motions, and induced-fit mechanisms, in accommodating substrate binding,...
What is a law passed by a legislative branch of government called? Also define legislative branch
If a company uses ABC and the expected activity level for Activity 1 is 1,100 whereas it is 1,353 for Activity 3, and the estimated cost for Activity 3 is $30,699.57 whereas it is $28,499.37 for...
How do biotic and abiotic components interact within ecosystems to drive the dynamics of energy flow, nutrient cycling, and ecological succession, and how are these interactions influenced by...
NeedOil is a firm that uses oil in its production process. If the price of oil increases, then the firm's cost will increase. We assume that NeedOil cannot pass on all incremental costs to customers...
What is the amount of total interest dollars earned on a $5,000 deposit earning 6% for 20 years?
Grete Corp. had the following foreign currency transactions during 2013: Purchased merchandise from a foreign supplier on January 20, 2013, for the U.S. dollar equivalent of $60,000 and paid the...
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2013, capital balances were as follows: Purkerson . . . . . . . . . . . . . . . . ....
Kingsfield starts a subsidiary operation in a foreign country on January 1, 2013. The country's currency is the kumquat (KQ). To start this business, Kingsfield invests 10,000 kumquats. Of this...
At a point $P$ in a body, Cartesian stress components are given by $\sigma_{x x}=80 \mathrm{MPa}, \sigma_{y y}=-40$ $\mathrm{MPa}, \sigma_{z z}=-40 \mathrm{MPa}$, and \(\tau_{x y}=\tau_{y...
Find the principal stresses and the orientation of the principal axes of stresses for the following cases of plane stress. a. \(\sigma_{x x}=40 \mathrm{MPa}, \sigma_{y y}=0 \mathrm{MPa}, \tau_{x...
Determine the principal stresses and their associated directions, when the stress matrix at a point is given by 11 1 [6]=112 MPa. [121]

Choy Co. purchased rice from China for 150,000 renminbi (r) on Nov. 1, 2015. Payment is due

Question:

Expert Answer:

Date of transaction Nov 1 2015 Due date of payment Jan 30 2016 forward rate on Nov 1 2015 for 90 days is 1 renminbi 0126 forward rate rate on Dec 31 2... View the full answer

Fundamentals of Advanced Accounting

Students also viewed these accounting questions