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    JULLIE CARMELLE H. CHATTO
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    Problem 1: Gilas Inc. purchased inventory costing 10,000 baht from a Thailand firm on October 30, 2021. Payment is due on January 30, 2022. On the same date, Gilas entered a forward contract to buy 10,000 baht on January 30, 2022. Journal entries are needed for the purchase and forward contract. Problem 2: On December 15, 20x1, ABC Co. sold goods to a Japanese firm for 4,000,000 yens. On the same date, ABC entered a 30-day forward contract to sell 4,000,000 yens for ₱1,880,000 to a bank. Journal entries are

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    Problem 1: Gilas Inc. purchased inventory costing 10,000 baht from a Thailand firm on October 30, 2021. Payment is due on January 30, 2022. On the same date, Gilas entered a forward contract to buy 10,000 baht on January 30, 2022. Journal entries are needed for the purchase and forward contract. Problem 2: On December 15, 20x1, ABC Co. sold goods to a Japanese firm for 4,000,000 yens. On the same date, ABC entered a 30-day forward contract to sell 4,000,000 yens for ₱1,880,000 to a bank. Journal entries are

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    10 views1 page

    FC Problem

    Uploaded by

    JULLIE CARMELLE H. CHATTO
    Problem 1: Gilas Inc. purchased inventory costing 10,000 baht from a Thailand firm on October 30, 2021. Payment is due on January 30, 2022. On the same date, Gilas entered a forward contract to buy 10,000 baht on January 30, 2022. Journal entries are needed for the purchase and forward contract. Problem 2: On December 15, 20x1, ABC Co. sold goods to a Japanese firm for 4,000,000 yens. On the same date, ABC entered a 30-day forward contract to sell 4,000,000 yens for ₱1,880,000 to a bank. Journal entries are

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Problem 1

    On October 30, 2021, Gilas Inc. purchased from a Thailand firm an inventory costing 10,000 baht.
    Payment is due on January 30, 2022. Also on October 30, Gilas Inc. entered into a foreign exchange
    forward to buy 10,000 baht on January 30, 2022.
    10/30/2021 12/31/2021 1/31/2022
    Spot rate (baht)…………………. P1.30 P1.42 P1.40
    30-day forward rate (baht)………… 1.41 1.43 1.44
    90-day forward rate (baht)………… 1.36 1.37 1.38

    Required: Prepare the necessary journal entries.

    Problem 2

    On December 15, 20x1, ABC Co. sold goods to a Japanese firm for 4,000,000 yens. ABC Co. was concerned
    about the fluctuation in the Japanese yen, so on this date, ABC Co. entered into a 30-day forward contract
    to sell 4,000,000 yens for ₱1,880,000 to a bank at the forward rate of ₱0.47.

    Relevant rates are shown below:


    Dec. 15, 20x1 Dec. 31, 20x1 Jan. 15, 20x2
    Spot rate ₱0.48 ₱0.49 ₱0.46
    Forward rate ₱0.47 ₱0.485 ₱0.46

    Required: Prepare the necessary journal entries.

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