Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 1

Gains and Losses Journalizing Exchange Rate
Euroam is a U.S.orporation that purchases motors from European manufacturers for distribution in the United States. recent purchase involved the following events:
Dec. Purchased tractors from WMB Motors for SFr4,000,000, payable in 45 days.urrent exchange rate, $0.75 per Swiss franc.Euroam uses the perpetual inventory system.)
Dec.1 Made year-end adjusting entry relating to the SFr4,000,000 account payable to WMB Motors.urrent exchange rate, $0.78 per Swiss franc.
Jan.5 Issued a check to World Bank for $3,080,000 in full payment of the account payable to WMB Motors.
Instructions
a.repare in general journal form the entries necessary to record the preceding events.
b.ompute the exchange rate (price) of the Swiss franc in U.S.ollars on January 15.
c.xplain a hedging technique that Euroam might have used to protect itself from the possibility of losses resulting from a significant increase in the exchange rate for the Swiss franc.