PROBLEM $15\mathrm{.}6$B A Comprehensive Problem: Journalizing Exchange Rate Effects $\backslash (\backslash$frac$\{\backslash$pi$\}\{1\}\backslash )$ LO$15-4,\backslash (\backslash$sqrt$\{3\}\backslash )$ LO$15-5,\backslash (\backslash$sqrt$\{3\}\backslash )$ LO$15-6$ Fox Games is a U$.$S$.$ company that manufactures computer game consoles. Many of the components for the consoles are purchased abroad, and the finished product is sold in foreign countries as well as in the United States. Among the recent transactions of Fox are the following: Oct. $25$ Purchased from Sutaki, a Japanese company, $15,000$ parts. The purchase price was $\backslash (120,000,000\backslash ),$ payable in $30$ days. Current exchange rate, $\backslash (\backslash$$ $0\mathrm{.}01\backslash )$ per yen. $($Fox uses the perpetual inventory method; debit the Inventory of Raw Materials account.$)$ Nov. $15$ Sold $500$ consoles to British Vibes for $\backslash (200,000\backslash ),$ due in $30$ days. The cost of the consoles, to be debited to the Cost of Goods Sold account, was $\backslash (\backslash$$ $160,000\backslash )$ Current exchange rate, $\backslash (\backslash$$ $1\mathrm{.}60\backslash )$ per British pound. $($Use one compound journal entry to record the sale and the cost of goods sold. In recording the cost of goods sold, credit Inventory of Finished Goods.$)$ Nov. $24$ Issued a check to Inland Bank for $\backslash (\backslash$$ $1,150,000\backslash )$ in full payment of account payable to Sutaki. Dec. $4$ Purchased $5,000$ black cases from Swiss Plastics for SFr$80,000,$ payable in $60$ days. Current exchange rate, $\backslash (\backslash$$ $0\mathrm{.}70\backslash )$ per Swiss franc. $($Debit Inventory of Raw Materials.$)$ Dec. $15$ Collected dollar$-$equivalent of $\backslash (200,000\backslash )$ from British Vibes. Current exchange rate, $\backslash (\backslash$$ $1\mathrm{.}55\backslash )$ per British pound. Dec. $21$ Sold $6,000$ game consoles to Sounds, a Norwegian retail chain, for NOK$40,000,000,$ due in $30$ days. Current exchange rate, $\backslash (\backslash$$ $0\mathrm{.}20\backslash )$ per Norwegian krone. The cost of the consoles, to be debited to Cost of Goods Sold and credited to Inventory of Finished Goods, is $\backslash (\backslash$$ $5,000,000\backslash ).$ Instructions a$.$ Prepare in general journal form the entries necessary to record the preceding transactions. b$.$ Prepare the adjusted entries needed at December $31$ for the SFr$80,000$ account payable to Swiss Plastics and the NOK $\backslash (40,000,000\backslash )$ account receivable from Sounds. Year$-$end exchange rates, $\backslash (\backslash$$ $0\mathrm{.}68\backslash )$ per Swiss franc and $\backslash (\backslash$$ $0\mathrm{.}18\backslash )$ per Norwegian krone. $($Use a separate journal entry to adjust each account balance.$)$ c$.$ Compute $($to the nearest dollar$)$ the unit sales price of consoles in U$.$S$.$ dollars in both the November $15$ and December $21$ sales transactions. $($The sales price may not be the same in each transaction.$)$ d$.$ Compute the exchange rate for the yen, stated in U$.$S$.$ dollars, on November $24.$ e$.$ Explain how Fox Games could have hedged its position to reduce the risk of loss from exchange rate fluctuations on $(1)$ its foreign payables and $(2)$ its foreign receivables.