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41.Frankfurter Company, a U.S. company, had a ruble receivable from exports to Russia and a euro payable resulting from imports from Italy. Frankfurter recorded foreign exchange loss related to both its ruble receivable and euro payable. Did the foreign currencies increase or decrease in dollar value from the date of.
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Multiple Choice Questions 1.Pigskin Co., a U.S. corporation, sold inventory on credit to a British company on April 8, 2013. Pigskin received payment of 35,000 British pounds on May 8, 2013. The exchange rate was ≤1 = $1.54 on April 8 and ≤1 = 1.43 on May 8. What amount of.
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81.Coyote Corp. (a U.S. company in Texas) had the following series of transactions in a foreign country during 2013: The appropriate exchange rates during 2013 were as follows: Prepare all journal entries in U.S. dollars along with any December 31, 2013 adjusting entries. Coyote uses a perpetual inventory system. .
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41.Under the temporal method, how would cost of goods sold be remeasured? A. Beginning of the year rate. B. Average rate. C. Current rate. D. A single historical rate. E. A combination of historical rates. 42.Under the current rate method, how would cost of goods sold be translated? A. Beginning of the year rate. B. Average.
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71.What is the major assumption underlying the one-transaction perspective? The one-transaction perspective assumes that an export sale is not complete until the foreign currency receivable has been collected and converted into U.S. dollars. 72.What is the purpose of a hedge of foreign exchange risk? Hedge of foreign exchange risk is a.
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Short Answer Questions 79.Gaw Produce Company purchased inventory from a Japanese company on December 18, 2013. Payment of 4,000,000 yen (×) was due on January 18, 2014. Exchange rates between the dollar and the yen were as follows: Required: Prepare all journal entries for Gaw Produce Co. in connection with the purchase and.
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Essay Questions77.A foreign subsidiary was acquired on January 1, 2013. Determine the exchange rate used to restate the following accounts at December 31, 2013. Land was purchased on October 1, 2013. Relevant exchange dates follow:(A) January 1, 2013(B) October 1, 2013(C) December 31, 2013(D) Average, 2013(E) Composite, using multiple dates.Identify.
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73.How does a foreign currency forward contract differ from a foreign currency option? A foreign currency forward contract obligates the parties to deliver one currency in exchange for another at a specified future date. On the other hand, the owner of a foreign currency option can choose whether to exercise.
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116.For each of the following situations, select the best answer concerning segment disclosures of reportable segments. (A.) Required to be disclosed by an operating segment, but not a geographical segment. (B.) Required to be disclosed by a geographical segment, but not an operating segment. (C.) Required to be disclosed by both an operating.
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86.Coyote Corp. (a U.S. company in Texas) had the following series of transactions in a foreign country during 2013: The appropriate exchange rates during 2013 were as follows: What amount will Coyote Corp. report in its 2013 balance sheet for Accounts payable? Accounts payable ((60,000 - 36,000 pesos) × $.25): $6,000 .
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85.Coyote Corp. (a U.S. company in Texas) had the following series of transactions in a foreign country during 2013: The appropriate exchange rates during 2013 were as follows: What amount will Coyote Corp. report in its 2013 balance sheet for Accounts receivable? Accounts receivable ((54,000 - 48,000 pesos) × $.25): $1,500 .
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21.A U.S. company's foreign subsidiary had the following amounts in stickles (§) in 2013: The average exchange rate during 2013 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The.
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80.Old Colonial Corp. (a U.S. company) made a sale to a foreign customer on September 15, 2013, for 100,000 stickles. Payment was received on October 15, 2013. The following exchange rates applied: Required: Prepare all journal entries for Old Colonial Corp. in connection with this sale assuming that the company closes its.
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77.What happens when a U.S. company sells goods denominated in a foreign currency and the foreign currency depreciates? The event results in a foreign exchange loss. 78.What happens when a U.S. company sells goods denominated in a foreign currency and the foreign currency appreciates? The event results in a foreign exchange.
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31.Under the temporal method, inventory at market would be remeasured at what rate? A. Beginning of the year rate. B. Average rate. C. Current rate. D. Historical rate. E. Composite amount. 32.Under the current rate method, inventory at market would be translated at what rate? A. Beginning of the year rate. B. Average rate. C. Current rate. D..
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93.For each of the following situations, select the best answer concerning accounting for foreign currency transactions: (G) Results in a foreign exchange gain. (L) Results in a foreign exchange loss. (N) No foreign exchange gain or loss. _____1. Export sale by a U.S. company denominated in dollars, foreign currency of buyer appreciates. _____2. Export sale.
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114.The following information for Urbanski Corporation relates to the three months ending June 30, 2013: Urbanski uses the LIFO method to account for inventory, and expects at least 15,000 units to be on hand in the ending inventory at year-end. Purchases made in the last six months are expected to cost.
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80.What exchange rate should be used to translate (a) revenues and expenses that occur throughout the year and (b) a gain or loss that occurs on a specific day? 81.Perkle Co. owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc. During 2013, Perkle engaged in hedging transactions.
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Essay Questions 67.Yelton Co. just sold inventory for 80,000 euros, which Yelton will collect in sixty days. Briefly describe a hedging transaction Yelton could engage in to reduce its risk of unfavorable exchange rates. Yelton could sign a forward exchange contract to sell the euros in 60 days, after they are.
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Multiple Choice Questions 1.In accounting, the term translation refers to A. the calculation of gains or losses from hedging transactions. B. the calculation of exchange rate gains or losses on individual transactions in foreign currencies. C. the procedure required to identify a company's functional currency. D. the calculation of gains or losses from all.
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78.In translating a foreign subsidiary's financial statements, what exchange rate should be used for the subsidiary's revenues and expenses? 79.How can a parent corporation determine the functional currency for a foreign subsidiary that conducts business in more than one country? .
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21.A U.S. company sells merchandise to a foreign company denominated in U.S. dollars. Which of the following statements is true? A. If the foreign currency appreciates, a foreign exchange gain will result. B. If the foreign currency depreciates, a foreign exchange gain will result. C. No foreign exchange gain or loss will.
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51.Esposito is an Italian subsidiary of a U.S. company. Esposito's ending inventory is valued at the average cost for the last quarter of the year. The following account balances are available for Esposito for 2013: Compute the cost of goods sold for 2013 in U.S. dollars using the current rate method. A. $376,550. B..
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115.The following information for Urbanski Corporation relates to the three months ending June 30, 2013: Urbanski uses the LIFO method to account for inventory, and expects at least 15,000 units to be on hand in the ending inventory at year-end. Purchases made in the last six months are expected to cost.
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82.Under what circumstances would the remeasurement of a foreign subsidiary's financial statements be required? The remeasurement of a foreign subsidiary's financial statements is required in the following situations:(A.) when the subsidiary's functional currency is the U.S. dollar.(B.) when the subsidiary operates in a highly inflationary economy.(C.) when the local currency is.
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92.On October 31, 2012, Darling Company negotiated a two-year 100,000 franc loan from a foreign bank at an interest rate of 3 percent per year. Interest payments are made annually on October 31, and the principal will be repaid on October 31, 2014. Darling prepares U.S.-dollar financial statements and has.
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