Scribd Logo
Upload

Welcome to Scribd!

  • 25 views

    FOREIGN CURRENCY Exercises

    Uploaded by

    Mae Dionisio
    1) Silent Company paid 31,800 CNY for goods from China on January 28, 2020. The CNY exchange rates on the invoice date of December 2, 2019 and payment date will affect the 2019 and 2020 profits respectively. 2) Great Company sold goods to Britain Corporation for 50,320 GBP on October 29, 2019, with payment due on January 30, 2020. The GBP exchange rates on the invoice and payment dates will affect the 2019 and 2020 profits respectively. 3) Sun Corp's subsidiary in Singapore had total assets of SGD 1,702,500 on December 31, 2019 and SGD 1,717,500 on December 31, 2020. The translation of these assets at historical and

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    FOREIGN CURRENCY Exercises

    Uploaded by

    Mae Dionisio
    25 views2 pages
    1) Silent Company paid 31,800 CNY for goods from China on January 28, 2020. The CNY exchange rates on the invoice date of December 2, 2019 and payment date will affect the 2019 and 2020 profits respectively. 2) Great Company sold goods to Britain Corporation for 50,320 GBP on October 29, 2019, with payment due on January 30, 2020. The GBP exchange rates on the invoice and payment dates will affect the 2019 and 2020 profits respectively. 3) Sun Corp's subsidiary in Singapore had total assets of SGD 1,702,500 on December 31, 2019 and SGD 1,717,500 on December 31, 2020. The translation of these assets at historical and

    Original Description:

    help

    Original Title

    FOREIGN-CURRENCY-Exercises

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) Silent Company paid 31,800 CNY for goods from China on January 28, 2020. The CNY exchange rates on the invoice date of December 2, 2019 and payment date will affect the 2019 and 2020 profits respectively. 2) Great Company sold goods to Britain Corporation for 50,320 GBP on October 29, 2019, with payment due on January 30, 2020. The GBP exchange rates on the invoice and payment dates will affect the 2019 and 2020 profits respectively. 3) Sun Corp's subsidiary in Singapore had total assets of SGD 1,702,500 on December 31, 2019 and SGD 1,717,500 on December 31, 2020. The translation of these assets at historical and

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views2 pages

    FOREIGN CURRENCY Exercises

    Uploaded by

    Mae Dionisio
    1) Silent Company paid 31,800 CNY for goods from China on January 28, 2020. The CNY exchange rates on the invoice date of December 2, 2019 and payment date will affect the 2019 and 2020 profits respectively. 2) Great Company sold goods to Britain Corporation for 50,320 GBP on October 29, 2019, with payment due on January 30, 2020. The GBP exchange rates on the invoice and payment dates will affect the 2019 and 2020 profits respectively. 3) Sun Corp's subsidiary in Singapore had total assets of SGD 1,702,500 on December 31, 2019 and SGD 1,717,500 on December 31, 2020. The translation of these assets at historical and

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

    FOREIGN CURRENCY TRANSACTIONS AND FOREIGN OPERATIONS

    PROBLEM 1

    On October 15, 2019, Silent Company, a Philippine company ordered merchandise to Loud Company, a company based in
    China, for 31,800 Chinese Yuan (CNY), the merchandise was delivered on December 18, 2019. The invoice was dated
    December 2, 2019, the shipping date, FOB Shipping Point. Silent Company paid the invoice on January 28, 2020.

    The spot rates for a CNY on the respective dates were:

    October 15, 2019 P7.69


    December 2, 2019 P7.62
    December 18, 2019 P7.56
    December 31, 2019 P7.23
    January 28, 2020 P7.32

    1. What amount will affect the profit or loss in 2019?


    2. What amount will affect the profit or loss in 2020?

    PROBLEM 2

    On June 26, 2019, Great Company, a Philippine company, sold goods on account to Britain Corporation for 50,320 Pounds
    (GBP). The date of invoice is October 29, 2019 and payment is due on January 30, 2020.

    Exchange rates for GBP were as follows:

    June 26, 2019 P67.50


    October 29, 2019 P68.70
    December 31, 2019 P64.10
    January 30, 2020 P62.40

    1. What amount will affect the profit or loss in 2019?


    2. What amount will affect the profit or loss in 2020?
    PROBLEM 3

    SUN CORP. owns a subsidiary in Singapore whose statement of Financial Position in Singapore Dollars (SGD) for the last two
    years follow:
    December 31, 2019 December 31, 2020
    Assets
    Cash and Cash Equivalents SGD 90,000 SGD 75,000
    Receivables 367,500 442,500
    Inventory 480,000 510,000
    Property and Equipment (net) 765,000 690,000
    Total Assets SGD 1,702,500 SGD 1,717,500

    Liabilities and Equity


    Accounts Payable SGD 165,000 SGD 225,000
    Long Term Debt 967,500 855,000
    Common Stock 345,000 345,000
    Retained Earnings 225,000 292,500
    Total Liabilities and Equity SGD 1,702,500 SGD 1,717,500

    Relevant Exchange Rates are:

    January 1, 2019 1 SGD = P45.00


    December 31, 2019 1 SGD = P42.50
    December 31, 2020 1 SGD = P47.50
    Average 2019 1 SGD = P43.75
    Average 2020 1 SGD = P45.00

    Sun Corp. formed the subsidiary on January 1, 2019. Income of the subsidiary was earned evenly throughout the years. No
    dividends were declared during 2019 and 2020.

    Questions:

    1. How much is the cumulative translation adjustment for 2019?


    2. How much Foreign Currency Translation Adjustment (FCTA) equity account in 2020? How much is the translation
    adjustment for 2020?

    You might also like