Hedged Forecasted Purchase Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016, Constellation purchased €10,500 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for €10,500 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier €10,500 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $14,250 in cash. Relevant exchange rates ($/€) are as follows: April 1, 2016 Spot rate $1.32 June 30, 2016 1.36 Forward rate for delivery June 30, 2016 $1.30
Q: Adger Corporation is a service company that measures its output based on the number of customers…
A: Spending variance is the difference between flexible budget expenses and actual results of…
Q: The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a…
A: The relevant cost refers to the cost which differs between the two alternatives or is avoidable and…
Q: Required information [The following information applies to the questions displayed below] During…
A: Lets understand the basics.As per accounting equation, total assets are always equal to total equity…
Q: Sandhill Boxes uses a petty cash imprest system. The fund was established on February 14 with a…
A: To maintain internal control over small cash disbursement amounts, a company establishes a petty…
Q: Favors Publishing has the following budgeted and actual amounts Sales price/book Material cost/book…
A: SALES PRICE VARIANCESales Price Variance is the difference between Budgeted Sales for actual…
Q: Kitty Company began operations in the current year and acquired short-term debt investments in…
A: Debt investment meaning:- The acquisition of a significant amount of debt with the intention of…
Q: Presented below are data on three promissory notes. Determine the missing amounts. (Use 360 days for…
A: A promissory note is a financial instrument that involves two parties, one is a borrower who…
Q: The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda…
A: When two or more people decide to conduct business together and share earnings and losses according…
Q: Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2024 with three…
A: Solution:-The query concerns financial accounting and focuses on converting and adjusting financial…
Q: Why should management explain poor performance in technical accounting terms? Only typed solution
A: The objective of the question is to understand the importance of explaining poor performance in…
Q: Determine due date and interest on notes Determine the due date and the amount of interest due at…
A: The promissory notes can be defined as a legal lending document that consists of the promise made by…
Q: Sheffield Corp. sells office equipment on July 31, 2022, for $19,200 cash. The office equipment…
A: Lets understand the basics.Journal entry is the act of keeping records of transactions in an…
Q: Fowler Incorporated purchased $86,000 of bonds on January 1, 2024. The bonds pay interest…
A: $16,000Explanation:Under IFRS 9, financial assets such as bonds are classified into three…
Q: Metlock Company took a physical inventory on December 31 and determined that goods costing $185,000…
A: Lets understand the basics.Inventory is generally calculated at a regular interval. It can be…
Q: The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3…
A: Overhead variance refers to the difference between the actual overhead costs incurred by a business…
Q: In a like - kind exchange, Greyland exchanged investment - use real property (FMV $210,000, adjusted…
A: Basis of the replacement property is the value of the replacement property. It is calculated by…
Q: A yogurt company sells its product for S4 per cup. The variable costs to produce each cup add up to…
A: The Unit Contribution Margin is a key financial metric that represents the amount of money each unit…
Q: [The following information applies to the questions displayed below.] Shadee Corporation expects to…
A: Lets understand the basics.Management prepares budget in order to estimate future profit and…
Q: None
A: PRODUCTION BUDGETProduction Budget is a Forecast of the Production for the Budgeted Peirod of an…
Q: Raptor Candles has the following inventory schedule for its luxury line of candles. Quantity Unit…
A: Lets understand the basics.Ending inventory and COGS can be calculated using,(1) FIFO(2) LIFO(3)…
Q: At the beginning of the year, Lambert Motors issued the three notes described below. Interest is…
A: Notes are also known as promissory notes which are a sort of debt instrument stating a promise to…
Q: During the month of August, Boyce Company had the following transactions: (1) Revenues of $ 127,000…
A: Cash flow statement :— It is one of the financial statements that shows change in cash and cash…
Q: On September 1, 2024, Triton Entertainment borrowed $24 million cash to fund a new Fun Park. The…
A: Journal entry records the accounting transactions of a business in a journal book. All the business…
Q: Old Victrola, Inc., produces top-quality stereos and uses process costing. The manufacture of…
A: Calculation of units introduced:Units transferred to finished goods = Units in beginning work in…
Q: Maritime Corp. is a junior mining company listed on the TSX. The common share price of Maritime…
A: The objective of the question is to record the issuance of stock options to a consultant and a…
Q: None
A: ACTIVITY BASED COSTINGActivity Based Costing is a Powerful tool for measuring…
Q: None
A: INCOME STATEMENTIncome Statement is one of the Important Financial Statement of the Company. Income…
Q: A machine costing $214,400 with a four-year life and an estimated $20,000 salvage value is installed…
A: Straight-line-Method -One of the most common techniques of depreciation is the straight line…
Q: None
A: Every business organisation needs to change its product mix, in order to stay competitive and to…
Q: Required information [The following information applies to the questions displayed below.] FedEx…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: The following information is available for the past month for a retail store: Sales Markups…
A: cost-to-retail ratio = (cost of goods available for sale / retail value of goods available for sale)…
Q: None
A: Bank reconciliation is the process of comparing a company's records of its bank transactions to the…
Q: Initial investment (for two hot air balloons) Useful life Salvage value Annual net income generated…
A: Accounting rate of return = Average annual income / Initial investmentPayback period = Initial…
Q: The teacher has offered to buy 2,000 copies of the CD at a price of $5.00 each. MSI could easily…
A: Incremental profit (Loss) is the difference of Revenue from special order and Relevant cost of…
Q: cumulative cash flow means the accumulated effect of cash inflows and to show the overall net…
A: The statement is True.Cumulative cash flow refers to the accumulated effect of cash inflows and…
Q: None
A: The cost of a product refers to the total amount of expenses incurred to produce or acquire a…
Q: Landmark buys $320,000 of SRW Company's 12%, 6-year bonds payable, at par value on July 1. Interest…
A: Each journal entry has its dual effect.A asset has debit balance and revenue has credit balance. And…
Q: Matt and Meg Comer are married and file a joint tax return. They do not have any children. Matt…
A: Tax liability refers to the legal obligation of an individual, business, or entity to pay taxes to…
Q: Ray Company provided the following excerpts from its Production Department's flexible budget…
A: Spending variance = Actual results - Flexible budget amountActivity variance = Flexible budget…
Q: Power Products Corporation, which sells a broad line of home detergent products, owns 75 percent of…
A: Answer:- Journal entry meaning:- In accounting, a journal entry is a documentation of deal or…
Q: vi.2
A: The objective of the question is to determine the average cost of each repurchased share before…
Q: addition, Kelso paid £45, 500 cash for the new truck. The exchange lacked commercial substance. What…
A: Commercial substance refers to the economic impact of a transaction beyond its accounting treatment.…
Q: Required information [The following information applies to the questions displayed below.] On…
A: Fixed Assets:Fixed assets simply means the long term tangible assets that are used by business for…
Q: Sales during the year were 545 units. Beginning inventory was 430 units at a cost of 56 per unit.…
A: Under the periodic system cost of goods sold and ending inventory is recorded at the end of the…
Q: Vogel, Inc., an S corporation for five years, distributes a tract of land held as an investment to…
A: Recognized capital gain is a profit earned from selling an assets. Recognized capital gains are…
Q: Convers Corporation (calendar year-end) acquired the following assets during the current tax year:…
A: MACRS depreciation:- In United States, the depreciation method utilized for tax purposes is…
Q: aptor Candles purchases a store on January 1st, 2018. Use the following parameters to answer the…
A: Depreciation means the loss in value of assets because of usage of assets, passage of time or change…
Q: 10) Conrad, Incorporated recently lost a portion of its records in an office fire. The following…
A: The objective of the question is to calculate the amount of direct materials purchased by Conrad,…
Q: Data for the two departments of Kimble & Pierce Company for June of the current fiscal year are as…
A: The equivalent units are calculated on the basis of the percentage of the work completed during the…
Q: Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2021.…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Brandlin company of anaheim, california sells parts to a foreign customer on december 1, 2017, with payment of 24,000 korunas to be received on march 1, 2018. Breanlin enters into a forward contract on december 1, 2017, to sell 24,000 korunas on march 1, 2018. Relevant exchange rates for the koruna on various dates are as follow: Date Spot Rate Forward Rate December 1, 2017 4.20 4.275 December 31, 2017 4.30 4.400 March 1, 2018 4.45 N/A 1. Assuming that Brandlin designates the forward contract as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in US dollars. 2. What is the impact on 2017 net income? 3. What is the impact on 2018 net income? What is the impact on net income over the two accounting periods?Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016, Constellation purchased €31,500 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for €31,500 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier €31,500 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $42,750 in cash. Relevant exchange rates ($/€) are as follows: PLEASE USE THE GENERAL JOURNAL PROVIDED FOR NECESSARY ENTRIES Spot rate Forward rate for deliveryJune 30, 2016 April 1, 2016 $ 1.34 $1.32 June 30, 2016 1.38 -- Prepare the journal entries made by Constellation Brands on June 30 and July 12 concerning the above events. Assume Constellation Brands is a calendar-year company and records cost of goods sold at the time of sale.…Constellation Brands, a U.S. company, purchases merchandise from a German supplier on a regular basis. On April 1, 2016, Constellation purchased €10,500 for delivery on June 30, 2016, in anticipation of an expected purchase of merchandise for €10,500 at the end of June. The forward contract was a qualified hedge of a forecasted transaction. Constellation took delivery of the merchandise, settled the forward contract, and paid the German supplier €10,500 on June 30, 2016. The merchandise was subsequently sold in the U.S. on July 12, 2016, for $14,250 in cash. Relevant exchange rates ($/€) are as follows: Spot rate Forward rate for deliveryJune 30, 2016 April 1, 2016 $ 1.32 $1.30 June 30, 2016 1.36 -- Prepare the journal entries made by Constellation Brands on June 30 and July 12 concerning the above events. Assume Constellation Brands is a calendar-year company, and records cost of goods sold at the time of sale. General Journal Date Description Debit Credit…
- Foreign currency hedge, firm purchase commitment. On October 2, 2016, Flx, a US company, entered into a forward contract to purcahse 50,000 euros for delivery in 180 days at a rate of $0.6350. The forward contract is a derivative instrument hedging an identifiable foreign currency purchase commitment for inventory as defined in ASC Topic 815. The spot rate for euros on October 2, 2016 was $0.6250. Spot rates and forward rates for euros on December 31, 2016 are as follows: December 31, 2016 March 31, 2017 Spot Rate $0.6390 $0.6560 Forward Rates 30-day futures $0.6410 $0.65750 90-day futures $0.6420 $0.6615 180-day futures $0.6450 $0.6680 Required: Prepare Journal Entries 1. Record the forward contract on…Brandlin company of anaheim, california, sells parts to a foreign customer on december 1, 2017, with payment of 24,000 korunas to be received on march 1, 2018. Brandlin enters into a forward contact on december 1, 2017 to sell 24,000 korunas on march 1, 2018. Relevant exchange rates for the korunas on various dates are as follow: date spot rate forward rate december 1, 2017 4.20 4.275 december 31, 2017 4.30 4.400 march 1, 2018 4.45 n/a brandli's incremental borrowing rate is 12 percent. The present value factor for two months at annual interest rate of 12 percent (1 percent per month) is 0.9803. Brandlin must close its books and prepare financial statements at december 31. 1. Assuming that brandlin designates the forward contract as a cash flow hedge of a foreign currency receivable and recognizes any premium or discount…Brandlin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 16,000 korunas to be received on March 1, 2018. Brandlin enters into a forward contract on December 1, 2017, to sell 16,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows: Date Spot Rate Forward rate (to march 1, 2018) December 1 , 2017 $2.70 $2.775 December 31 , 2017 2.80 2.900 March 1, 2018 2.95 N/A Brandlin’s incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. Brandlin must close its books and prepare financial statements at December 31.a. Assuming that Brandlin designates the forward contract as a cash flow hedge of a foreign currency receivable and recognizes any premium or discount using the straight-line method, prepare journal entries for these transactions in U.S. dollars. What is the impact on 2017 net…
- Brandlin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 16,000 korunas to be received on March 1, 2018. Brandlin enters into a forward contract on December 1, 2017, to sell 16,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2018) December 1, 2017 $ 3.40 $ 3.475 December 31, 2017 3.50 3.600 March 1, 2018 3.65 N/A Brandlin's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. Brandlin must close its books and prepare financial statements at December 31. a-1. Assuming that Brandlin designates the forward contract as a cash flow hedge of a foreign currency receivable and recognizes any premium or discount using the straight-line method, prepare journal entries for these transactions in U.S.…On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 180,000 FCUS with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 180,000 FCUS. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Forward Rate Spot Rate $0.29 Date (to April 30, 2018) $ 0.28 November 1, 2017 December 31, 2017 April 30, 2018 0.27 0.25 0.26 N/A Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610. a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. b. What is the impact on net income in 2017? C. What is the impact on net income in 2018? Complete this question by entering your answers in the tabs below. Req A Req B and C Prepare all…On September 1, 2019 Philips corporation sold merchandise to a foreign customer for 300,000 Brazilian real with payment to be received on March 1, 2020. At the date of sale, Philips entered into a six month forward contract to sell 300,000 reals. The forward contract was properly designated as a fair value hedge. The following exchange rates apply: Date Spot rate Forward rate (to March 1, 2020) September 1, 2019 $0.46 $ 0.49 December 31, 2019 0.50 0.52 March 1, 2020 0.54 Philips’ incremental borrowing rate is 12%. The present value factor at an annual interest rate of 12% is .9610. What journal entry should Philips prepare to record the value of the forward contract on December…
- On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 100,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 100,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date Spot rate Forward rate (to April 30, 2018) November 1, 2017 $0.21 $0.20 December 31, 2017 0.19 0.17 April 30, 2018 0.18 N/A Bernard’s incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610.a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.b. What is the impact on net income in 2017?c. What is the impact on net income in 2018?On Dec 1, 2015, XYZ (a US firm) entered into a transaction to import raw materials from EU country. The account is to be settled Mar 1, 2016 with the payment of 50,000 euros. The spot rate for euros on Dec 1 was $1.4/euro and on Mar 1 was $1.44/euro. If XYZ does not hedge the pavable, raw materials will be recorded on the books on March 1, 2016 at: O a. $72,000 Ob. $70,000 O c. 50,000 euros d. None ofthe aboveNew Colony Corporation (a U.S. company) made a sale to a foreign customer on September 15, 2015 for 100,000 foreign currency units (FCU). It received payment on October 15, 2015. The following exchange rates for 1 FCU apply: September 15, 2015 $0.40, September 30, 2015 $0.42 and October 15, 2015 $0.37. Prepare all journal entries for New Colony in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements.