Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 11 - Multinational Accounting: Foreign Currency Transactions And Financial Instruments
E11-10 (continued)
February 14, 20X8
Foreign Currency Transaction Loss
700
Foreign Currency Receivable from Exchange Broker (SFr)
700
Revalue foreign currency receivable to current equivalent U.S. dollar value:
$96,600 = SFr 140,000 x $0.69 Feb. 14, 20X8, spot rate
- 97,300 = SFr 140,000 x $0.695 Dec. 31, 20X7, forward rate
$ 700 = SFr 140,000 x ($0.69 - $0.695)
Accounts Payable (SFr)
1,400
Foreign Currency Transaction Gain
1,400
Revalue foreign currency accounts payable to current U.S. dollar value:
$96,600 = SFr 140,000 x $0.69 Feb. 14, 20X8, spot rate
- 98,000 = SFr 140,000 x $0.70 Dec. 31, 20X7, spot rate
$ 1,400 = SFr 140,000 x ($0.69 - $0.70)
Dollars Payable to Exchange Broker ($)
93,800
Cash
93,800
Pay U.S. dollars to exchange broker for forward contract.
Foreign Currency Units (SFr)
96,600
Foreign Currency Receivable from Exchange Broker (SFr)
96,600
Receive francs from exchange broker:
$96,600 = SFr 140,000 x $0.69 spot rate
Accounts Payable (SFr)
96,600
Foreign Currency Units (SFr)
96,600
Settle foreign currency payable.
