Nance Company sold inventory on October 1, 2020 to a foreign customer for 850,000 units of...

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Nance Company sold inventory on October 1, 2020 to a foreign customer for 850,000 units of foreign currency (FC) due on January 31, 2021. Simultaneously, Nance entered into a forward contract to sell 850,000 units of FC on January 31, 2021 at the forward rate of $.75. Payment was received from the foreign customer on January 31, 2021. Nance company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Date Spot Rate(Delivery on 1/31/2021) 10/1/2020 0.72 0.75 12/31/20200.73 0.79 1/31/2021 0.76 (Reminder: To avoid confusion as explained in class, only use the following accounts to make journal entries for foreign currency transactions: Inventory, Sales, Cash, Machine, Equipment, A/Payable (FC), A/Receivable (FC), Exchange GL, Fwd Contract, Contract G, Contract GL- OCI, Firm Commitment, Commitment G/L, Option, Option GL, Option G/L-OCL) Required: A. Prepare all journal entries relative to the above event by Nance on October 1, 2020. Buy/Sell Account Dr. Account Cr. B. Prepare all joumal entries relative to the above event by Nance on December 31, 2020 Buy/Sell Account Buy/Sell Account Account Financing Account Account Account Account Cr. C. Prepare all journal entries relative to the above event by Nance on January 31, 2021. Buy/Sell Account Dr. Account Financing Account Account Account Dr. Account Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Account Cr. C. Prepare all journal entries relative to the above event by Nance on January 31, 2021. Buy/Sell Account Dr. I For Blank 16 Account Account Account Financing Account Account Account Account Cr. Dr. Cr. Dr. Cr. Dr. Cr. Nance Company sold inventory on October 1, 2020 to a foreign customer for 850,000 units of foreign currency (FC) due on January 31, 2021. Simultaneously, Nance entered into a forward contract to sell 850,000 units of FC on January 31, 2021 at the forward rate of $.75. Payment was received from the foreign customer on January 31, 2021. Nance company ends its fiscal year on December 31. The following exchange rates were quoted: Forward Rate Date Spot Rate(Delivery on 1/31/2021) 10/1/2020 0.72 0.75 12/31/20200.73 0.79 1/31/2021 0.76 (Reminder: To avoid confusion as explained in class, only use the following accounts to make journal entries for foreign currency transactions: Inventory, Sales, Cash, Machine, Equipment, A/Payable (FC), A/Receivable (FC), Exchange GL, Fwd Contract, Contract G, Contract GL- OCI, Firm Commitment, Commitment G/L, Option, Option GL, Option G/L-OCL) Required: A. Prepare all journal entries relative to the above event by Nance on October 1, 2020. Buy/Sell Account Dr. Account Cr. B. Prepare all joumal entries relative to the above event by Nance on December 31, 2020 Buy/Sell Account Buy/Sell Account Account Financing Account Account Account Account Cr. C. Prepare all journal entries relative to the above event by Nance on January 31, 2021. Buy/Sell Account Dr. Account Financing Account Account Account Dr. Account Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Account Cr. C. Prepare all journal entries relative to the above event by Nance on January 31, 2021. Buy/Sell Account Dr. I For Blank 16 Account Account Account Financing Account Account Account Account Cr. Dr. Cr. Dr. Cr. Dr. Cr.

Answer rating: 100% (QA)

Solution A All the necessary journal entries in the books of Nance for October 1 2020 are given belo... View the full answer