Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

تمرين 22

Wolfe Computer is a U.S. company that manufactures portable personal computers. Many of the components for the computer are purchased abroad, and the finished product is sold in foreign countries as well as in the United States. Among the recent transactions of Wolfe are the following:
Instructions
a. Prepare in general journal form the entries necessary to record the preceding transactions.
b. Prepare the adjusting entries needed at December 31 for the €1,200.000 account payable to German Optical and the SF23.750,000 account receivable from Computique. Year-end exchange rates. $0.7000 per euro and $0.5980 per Swiss franc. (Use a separate journal entry to adjust each account balance.)
c. Compute (to the nearest dollar) the unit sales price of computers in U.S. dollars in either the November 9 or December 11 sales transaction. (The sales price is the same in each transaction.)
d. Compute the exchange rate for the yen, stated in U.S. dollars, on November 27.
e. Explain how Wolfe Computer could have hedged its position to reduce the risk of loss from exchange rate fluctuations on ( 1 ) its foreign payables and ( 2 ) its foreign receivables.