To record the purchase of inventories for 150,000 when the exchange rate is $1.30:1. Company purchases...

 

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To record the purchase of inventories for 150,000 when the exchange rate is $1.30:1. Company purchases forward contract to buy 150,000 at $1.35:1. Exchange rate at maturity is $1.45:1. Required: (Answers must be typed) a. Prepare all the journal entries at the inception of the contract through the maturity of the contract. b. Post all journal entries to the t-accounts provided. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 B ASSETS Cash Inventory Receivable from Broker Foreign Currency Units T Accounts + D E LIABILITIES F Accounts Payable Payable to Broker G H EQUITY 1 K REVENUES L Sales Revenue Foreign Currency Gain 4 REVENUES Sales Revenue Foreign Currency Gain EXPENSES Foreign Currency Loss To record the purchase of inventories for 150,000 when the exchange rate is $1.30:1. Company purchases forward contract to buy 150,000 at $1.35:1. Exchange rate at maturity is $1.45:1. Required: (Answers must be typed) a. Prepare all the journal entries at the inception of the contract through the maturity of the contract. b. Post all journal entries to the t-accounts provided. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 B ASSETS Cash Inventory Receivable from Broker Foreign Currency Units T Accounts + D E LIABILITIES F Accounts Payable Payable to Broker G H EQUITY 1 K REVENUES L Sales Revenue Foreign Currency Gain 4 REVENUES Sales Revenue Foreign Currency Gain EXPENSES Foreign Currency Loss

Answer rating: 100% (QA)

a Journal Entries 1 Inception of contract DR Inventory 150000 CR Payable to Broker 150000 Rec... View the full answer