Record the journal entries that Blue would need related to the dates listed above. If no entry is required, state "no entry."
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- On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign supplier for 50,000 schillings. Lisbeth agrees to pay in 45 days after it sells the merchandise. Lisbeth makes sales rather quickly and pays the entire obligation on January 25, 2018. Currency exchange rates for 1 schilling are as follows: December 15, 2017 $0.28December 31, 2017 0.30January 25, 2018 0.33January 31, 2018 0.34 Prepare all journal entries for Lisbeth Company in connection with this purchase and payment.On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows: December 20, 2017 $1.05December 31, 2017 1.02January 10, 2018 0.98a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?Turbo Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2017, for 100,000 markkas. It paid the foreign currency account payable on January 17, 2018. The following exchange rates for 1 markka are known:November 1, 2017 $0.754December 31, 2017 0.742 January 15, 2018 0.747a. How does the fluctuation in exchange rates affect Turbo’s 2017 income statement?b. How does the fluctuation in exchange rates affect Turbo’s 2018 income statement?
- On December 15, 2017, Lisbeth Inc. (a U.S. company) purchases merchandise inventory from a foreign supplier for 50,000 schillings. Lisbeth agrees to pay in 45 days after it sells the merchandise. Lisbeth makes sales rather quickly and pays the entire obligation on January 25, 2018. Currency exchange rates for 1 schilling are as follows:Prepare all journal entries for Lisbeth Company in connection with this purchase and payment.On December 20, 2017, Butanta Company (a U.S. company headquartered in Miami, Florida) sold parts to a foreign customer at a price of 50,000 ostras. Payment is received on January 10, 2018. Currency exchange rates for 1 ostra are as follows:a. How does the fluctuation in exchange rates affect Butanta’s 2017 income statement?b. How does the fluctuation in exchange rates affect Butanta’s 2018 income statement?Rabato Corporation acquired merchandise on account from foreign supplier on November 1, 2015, for 60,000 LCU (local currency units). It paid the foreign currency account payable on January 15, 2016. The following exchange rates for 1 LCU are known: December 1, 2015 $0.345, December 31, 2015 $0.333 and January 1, 2016 $0.359. How does the fluctuation in exchange rates affect Rabato's 2015 income statement? How does the fluctuation in exchange rates affect Rabato's 2016 income statement?
- On December 15, 2020, Lisbeth Inc. (a U.S.-based company) purchases merchandise inventory from a foreign supplier for 50,000 schillings. Lisbeth agrees to pay in 45 days, after it sells the merchandise. Lisbeth makes sales rather quickly and pays the entire obligation on January 25, 2021. Currency exchange rates for 1 schilling are as follows: Date U.S. Dollar per Schilling December 15, 2020 $ 0.28 December 31, 2020 0.30 January 25, 2021 0.33 January 31, 2021 0.34 Prepare all journal entries for Lisbeth Company in connection with this purchase and payment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)Turbo Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2017, for 100,000 markkas. It paid the foreign currency account payable on January 17, 2018. The following exchange rates for 1 markka are known:a. How does the fluctuation in exchange rates affect Turbo’s 2017 income statement?b. How does the fluctuation in exchange rates affect Turbo’s 2018 income statement?New 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 $0.37. Prepare all journal entries for New Colony in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements.
- McCarthy, Inc.’s Brazilian subsidiary borrowed 100,000 euros on January 1, 2017. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: BRL (per euro€) US $ Per BRL January 1, 2017 BRL 4.2 $0.28 Average, 2017 BRL 4.3 $0.25 December 31, 2017 BRL 4.6 $0.20 At what amount should the Brazilian subsidiary’s euro note payable be reported on McCarthy’s December 31, 2017, consolidated balance sheet? Choose the correct.a. $84,000.b. $86,000.c. $92,000.d. $128,800.MNC Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2017, with payment of 10 million South Korean won to be received on March 31, 2018. The following exchange rates apply: Date Spot Rate Forward rate ( to march 31, 2018 ) December 1, 2017 $0.0035 $0.0034 December 31, 2017 0.0033 0.0032 March 31, 2018 0.0038 N/A MNC’s incremental borrowing rate is 12 percent. The present value factor for three months at an annual interest rate of 12 percent (1 percent per month) is 0.9706. Assuming that MNC entered into a forward contract to sell 10 million South Korean won on December 1, 2017, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2017 resulting from a fluctuation in the value of the won? Choose the correct.a. No impact on net income.b. $58.80 decrease in net income.c. $2,000 decrease in net income.d. $1,941.20 increase in net income.McCarthy, Inc.’s Brazilian subsidiary borrowed 100,000 euros on January 1, 2017. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: BRL (per euro€) US $ Per BRL January 1, 2017 BRL 4.2 $0.28 Average, 2017 BRL 4.3 $0.25 December 31, 2017 BRL 4.6 $0.20 What amount of foreign exchange gain or loss should be reflected in McCarthy’s 2017 consolidated net income?a. $8,000 loss.b. $10,000 loss.c. $2,000 gain.d. $5,000 gain.