Accounting Chapter 15 Homework If a sales agreement requires a foreign customer to pay U.S. dollars to the United

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Appendix 15A

Investments in International Operations

QUESTIONS

15A. If the foreign exchange rate falls from $1.40 to $1.30 during the time the U.S.

company holds a receivable that is denominated in the foreign currency, the U.S.

Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 15A

QUICK STUDIES

Quick Study 15-17A (10 minutes)

Date of Sale

Accounts Receivable …………………………………………….

14,500

Sales ……………………………………………………………….

13,500

1,000

Accounts Receivable ……………………………………….

Quick Study 15-18A (10 minutes)

Mar. 1

Account Receivable—Hamac …………………………………

9,076

Sales ……………………………………………………………….

9,076

Mar. 31

9,798

Foreign Exchange Gain ……………………………………

Accounts Receivable—Hamac ………………………….

9,076

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EXERCISES

Exercise 15-16A (25 minutes)

2017

Dec. 16

Accounts Receivable⎯Bronson Ltd. ……………………..

24,791

Dec. 31

Jan. 15

Cash (17,000 x $1.4482) …………………………………………

932

Exercise 15-17A (25 minutes)

Quarter ended June 30, 2017

May 8 recorded amount (800,000 x $0.1323) ………………….

$105,840

June 30 balance sheet amount (800,000 x $0.1352) ………..

Quarter ended September 30, 2017

June 30 balance sheet amount ……………………………………..

$108,160

Sept. 30 balance sheet amount (800,000 x $0.1368) ……….

Quarter ended December 31, 2017

Sept. 30 balance sheet amount ……………………………………..

$109,440

Dec. 31 balance sheet amount (800,000 x $0.1335) ………..

Quarter ended March 31, 2018

Dec. 31 balance sheet amount ……………………………………..

$106,800

Feb. 10, 2018, amount received (800,000 x $0.1386) ………

Note — The combined net gain for all four quarters equals:

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PROBLEM SET A

Problem 15-6AA (60 minutes)

Part 1

2017

Apr. 8

Cash ………………………………………………………………………………

5,938

Sales ………………………………………………………………………..

5,938

Nov. 18

Cash ………………………………………………………………………………

13,800

Foreign Exchange Loss ………………………………………………….

300

Accounts Receivable⎯Sumito …………………………………..

14,100

(1,500,000 yen x $0.0092/yen)

Dec. 20

Accounts Receivable⎯Hamid Albar ………………………………..

7,652

Sales ………………………………………………………………………..

7,652

(17,000 ringgits x $0.4501/ringgits)

Dec. 31

Accounts Receivable⎯Smithers. ……………………………………

Foreign Exchange Gain * …………………………………………..

Dec. 31

Foreign Exchange Loss* …………………………………………………

Accounts Receivable⎯Hamid Albar …………………………..

Accounts Receivable⎯Sumito ………………………………………..

Sales ………………………………………………………………………..

Accounts Receivable⎯Smithers …………………………………….

Sales ………………………………………………………………………..

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Problem 15-6AA (Continued)

2018

Jan. 12

Cash* ……………………………………………………………………………..

27,928

Accounts Receivable⎯Smithers** ……………………………..

27,778

Jan. 19

Cash* ……………………………………………………………………………..

Accounts Receivable⎯Hamid Albar** ………………………..

Part 3

To reduce the risk of foreign exchange gain or loss, Doering could attempt

to negotiate foreign customer sales that are denominated in U.S. dollars.

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PROBLEM SET B

Problem 15-6BA (60 minutes)

Part 1

2017

May 26

Accounts Receivable—Fuji …………………………………………….

60,450

64,800

July 25

59,800

60,450

Accounts Receivable—Martinez Brothers ……………………….

38,556

Accounts Receivable—Chi–Ying ……………………………………..

35,975

Dec. 31

Accounts Receivable—Martinez Brothers ………………………..

Dec. 31

Accounts Receivable—Chi–Ying ……………………………………..

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Problem 15-6BA (Concluded)

2018

Part 2

Foreign exchange gain reported on 2017 income statement

Part 3

To reduce the risk of foreign exchange gain or loss, Datamix could attempt

to negotiate foreign customer sales that are denominated in U.S. dollars.