Nama : Meliana Fitri Faradila

NIM : 023001801111

Mata Kuliah : Akuntansi Keuangan Lanjutan 1

Nama Dosen : Prof.Dr. Etty Murwaningsari.,Ak.,M.M.,C.A

TUGAS KELAS DOSEN AKUNTANSI KEUANGAN LANJUTAN 1 CHAPTER 11

E11-4 Accounts Balance

Merchant Company had the following foreign currency transactions :

1. On November 1, 20X6. Merchant sold goods to a company located in Munich, Germany. The
receivable was to settled in European euros on February 1. 20X7, with the receipt of € 250,000
by Merchant Company.
2. On November 1, 20X6, Merchant purchased machine parts from a company located in Berlin,
Germany, Merchant is to pay € 125,000 on February 1,20X7.

The direct exchange rates are as follows:

November 1, 20X6 € 1= $ 0.60

December 31,20X6 € 1= $ 0.62
February 1,20X7 € 1= $ 0.58

Required

a. Prepare T-account for the following five account related to these transactions : Foreign Currency
Units ( € ), Accounts Receivable ( € ), Accounts Payable ( € ). Foreign Transactions Loss, and
Foreign Currency Transactions Gain.
b. Within the T – accounts you have prepared, appropriately record the following items:

1. The November 1, 20X6, report transaction ( Sale ).

2. The November 1, 20X6, import transaction ( Purchase ).

3. The December 31, 20X6, year - ended adjustment required of the foreign currency –
denominated payable of € 250,000.

4. The December 31, 20X6, year – ended adjustment required of the foreign currency –
denominated payable of the € 125,000.
 5. The February, 1 20X7, adjusting entry to determine the U.S . dollar – equivalent value of the
foreign currency receivable on that date.

6. The February, 1 20X7, adjusting entry to determine the U.S . dollar – equivalent value of the
foreign currency payable on that date.

7. The February 1, 20X7, settlement of the foreign currency receivable.

8. The February 1, 20X7, settlement of the foreign currency payable

Jawab :

Foreign Currency Units (€ )

From Receivable :   To Payable:
145,00
(€250,000 x $ 0.58) ( 7 ) 2/1/20X7 0 (€125,000 x $ 0.58) ( 8 ) 2/1/20X7 72,500
Balance 2/2/20X7 72,500

Accounts Receivable ( € )
150,00
(€ 250,000 x $ 0.60) ( 1 ) 11/1/20X6 0
[€ 250,000 x ( 3 ) 12/31/20X6 5,000
( $ 0.62- $ 0.60 )]  
Balance 155,00
(€250,000 x $0.62) 12/31/20X6 0
  [€ 250,000 x (5) 2/1/20X7 AdjE 10,000
      ( $ 0.58 - $ 0.62 )]    
(€ 250,000 x $ 145,00 (€ 250,000 x $ (7) 2/1/20X7 145,00
0.58 ) Balance 2/1/20X7 0 0.58) Settle 0
Balance 2/2/20X7 0

Accounts Payable ( € )
(€ 125,000 x $ (2) 11/1/20X6
  0.60) 75,000
(4) 12/31/20X6
[€ 125,000 x AdjE 2,500
      ($ 0.62 - $ 0.60 )]    
(€ 125,000 x $ Balance
  0.58) 12/31.20X6 77,500
[€ 125,000 x (6) 2/1/20X7 AdjE 5,000
($ 0.58 -$ 0.62 )]          
(€ 125,000 x $ (8) 2/1/20X7 (€ 125,000 x $
0.58) Settle 72,500 0.58) Balance 2/1/20X7 72,500
  Balance 2/2/20X7 0
 Foreign Currency Transactions Loss (€ )
(4) 12/31/20X6
[€ 125,000 x AdjE 2,500
( $ 0.62- $ 0.60 )]          
[€ 250,000 x (5) 2/1/20X7 AdjE 10,000
( $ 0.58- $ 0.62 )]  
 
Foreign Currency Transactions Gain (€ )
(3) 12/31/20X6
[€ 250,000 x AdjE 5,000
      ( $ 0.62- $ 0.60 )]    
  [€ 125,000 x (6) 2/1/20X7 AdjE 5,000
( $ 0.58- $ 0.62 )]

E11-6 Transactions With Foreign Companies

Harris Inc. had the following transactions :

1. On May 1. Harris purchase parts a Japanese company for a U.S. dollar equivalent of $ 100,000.
to be paid on June 20. The exchange rates were

May 1 1 yen = $ 0.0070

June 20 1 yen = 0.0075

2. On July 1. Harris sold products to a Brazilian customers for a U.S. dollar equivalent of $ 10,000,
to be received on August 10. Brazil’s local currency unit is the real. The exchange rates were.

July 1 1 real = $ 0.20

August 10 1 real= 0.22

Required

a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required
for the dates of transactions and their settlement in U.S. dollars.
b. Assume that the two transactions are denominated in the applicable LCUs of the foreign
entities. Prepare the entries required for the dates of the transactions and their settlement in
the LCUs of the Japanese company ( yen ) and the Brazilian customers ( real ).
Jawab:

a. May 1

Inventory ( or Purchases ) 8,400

Accounts Payable 8,400
Foreign purchase denominated in U.S dollars

June 20

Accounts Payable 8,400

Cash 8,400
Settle Payable

July 1

Accounts Receivable 10,000

Sales 10,000
Foreign sale denominated in U.S dollars

August 20

Cash 10,000
Accounts Receivable 10,000
Collect Receivable

b. May 1

Inventory ( or Purchases ) 8,400

Accounts Payable ( ¥ ) 8,400
Foreign Currency denominated in ye: $ 8,400 / $ 0.0070 = ¥ 1,200,000

June 20

Foreign Currency Transactions Loss 600

Accounts Payable ( ¥ ) 600
Revalue foreign currency payable to U.S dollar equivalent value :
$ 9,000 = ¥ 1,200,000 x $ 0.0075 June 20 spot rate
( 8,400)= ¥ 1,200,000 x $ 0.0070 May 1 spot rate
$ 600 = ¥ 1,200,000 x ( $ 0.0075 - $ 0.0070 )

Accounts Payable ( ¥ ) 9,000

 Foreign Currency Units ( ¥ ) 9,000
Settle payable denominated in yen

Accounts Receivable ( BRL ) 10,000

Sales 10,000
Foreign sale denominated in Brazilian reals :
$ 10,00 / $ 0.20 = BRL 50,000

August 10

Accounts Receivable ( BRL ) 1,000

Foreign Currency Transactions Gain 1,000
Revalue foreign currency payable to U.S dollar equivalent value :
$11,000 = BRL 50,000 x $ 0.22 June 20 spot rate
( 10,000)= BRL 50,000 x $ 0.20 May 1 spot rate
$ 1,000 = BRL 50,000 x ( $ 0.22 - $ 0.20 )

Foreign Currency Units ( BRL ) 11,000

Accounts Receivable ( BRL ) 11,000
Receive Brazilian reals in settlement of receivable
E11-9 Purchase with Forward Exchange Contract

Merit & Family purchased engines from Canada for 30,000. Canadian dollars on March 10 with
payment due on June 8. Also on March 10. Metrit acquired an 90 – day forward contract to
purchase 30,000 Canadian dollars at CS! = $ 0.58. The forward contract was acquired to manage
Merit & Family’s exposed net liability position in Canadian dollars, but it was not designated as a
hedge.

The support rates were:

July 1 1 real = $ 0.20

August 10 1 real= 0.22
Required

Prepare journal entries for Merit & Family to record the purchase of the engines, entries associated with
the forward contract, and entries for the payment of the foreign currency payable.

Jawab:

3 / 10 6/8

Transactions Date Settlement Date

- Accounts Payable in C$ - Receive C$ from FEC completion

- Sign 90-days FEC to receive C$ - Settle payable in C$

March 10

Inventory ( or Purchases ) 17,100

Accounts Payable 17,100

Foreign purchase of engines :$ 17,100 = C $ 30,000 x $ 0.57

Foreign Currency Receivable form Exchange Broker ( C$ ) 17,400

Dollars Payable to Exchange Broker ( $ ) 17,400

Signed 90-day forward exchange contract to receive C$:

 $17,400 = C$ 30,000 x $ 0.58 forward rate

June 8

Foreign Currency Receivables from Exchange Broker (C$) 600

Foreign Currency Transactions Gain 600
Revalue foreign currency payable to current equivalent U.S dollar value :
$18,000 = C$ 30,000 x $ 0.60 June 8 spot rate
( 17,400)= C$ 30,000 x $ 0.58 March 10 forward rate
$ 600 =C$ 30,000 x ( $ 0.60 - $ 0.58 )

Foreign Currency Transactions Loss 900

Accounts Payable 900
Revalue foreign currency payable to current equivalent U.S dollar value :
$ 900 = C$ 30,000 x ( $ 0.60 - $ 0.57 )

Dollars Payable to Exchange Broker ( $ ) 17,400

Cash 17,400
Pay U.S dollars to exchange broker for forward contract.

Foreign Currency Units ( C$ ) 18,000

Foreign Currency Receivable from Exchange Broker (C$) 18,000
Receive Canadian dollars from Exchange broker :
$ 18,000 = C$ 30,000 x $ 0.60 spot rate

Accounts Payable (C$ ) 18,000

Foreign Currency Units ( C$ ) 18,000

Settle foreign currency payable

E11-13 Sale with Forward Contract

Alman Company sold pharmaceunticals to a Swedish company for 200,000 kronor ( SKr ) on April

20, with settlement to be in 60 days . On the same date, Alma entered into a 60 – day forward Contract
to sell 200,000 SKr at the forward rate of 1 SKr = $ 0.167 in order to manage is exposed foreign currency
receivable. The forward contract is not designated as a hedge. The spot rates were

April 20 SKr 1 = $ 0.170

June 19 SKr 1 = 0.165
Required

a. Record all necessary entries related to the foreign transactions and the forward contract.
b. Compare the effect on net income of Alma’s use of the forward exchange contract versus the
effects if Alman had not used a forward exchange contract.

Jawab :

April 20 June 19

Transactions Date Settlement Date

- Receivable in kronor - Receive kronor from receivable

- Sign FEC to deliver kronor - Complete FEC with delivery of kronor

Forward rate : SKr 1 = $ 0.167 SKr 1 = $ 0.165

Sport RATE : SKr 1 = $ 0.170

a. April 20

Accounts Receivable ( SKr ) 34,000

Sales Revenue 34,000
$ 34,000 = SKr 200,000 x $ 0.17 spot rate

Dollars Receivable from Exchange Broker 33,400

Foreign Currency Payable to Exchange Broker (SKr) 33,400
Sign 60-day forward exchange contract to deliver kronor :
$ 33,400 = SKr 200,000 x $ 0.167 forward rate

June 19

Foreign Currency Transactions Loss 1,000

Accounts Receivable (SKr) 1,000
Revalue foreign currency receivable to current equivalent U.S dollars value :
$ 33,000 = SKr 200,000 x $ 0.165 June 19 spot rate
( 34,000)= SKr 200,000 x $ 0.170 April 20 spot rate
$ 1,000 = SKr 200,000 x ( $ 0.165 - $ 0.170 )
 Foreign Currency Payable to
Exchange Broker (SKr) 400
Foreign Currency
Transaction Gain 400
Foreign Currency Payable to
Exchange Broker (SKr) 400
Foreign Currency
Transaction Gain 400
Foreign Currency Payable to Exchange Broker (Skr) 400
Foreign Currency Transaction Gain 400

Revalue foreign currency

payable to current U.S. dollar
value:
 $33,000 = SKr
200,000 x $0.165 June 19 spot rate
- 33,400 = SKr
200,000 x $0.167 April 20 forward
rate
$ 400 = SKr
200,000 x $0.002
Revalue foreign currency payable to current U.S. dollar value:

$33,000 = Skr200,000 x 0.165 June 19 spot rate

-33,400 = Skr200,000 x 0.167 April 20 spot rate

$ 400 = Skr200,000 x 0.002

Foreign Currency Units(Skr) 33,000

Accounts Receivable(Skr) 33,000
Revalue foreign currency payable to current U.S. dollar value:

$33,000 = Skr200,000 x $0.165 spot rate

Foreign Currency Payable to Exchane

Broker (SKr) 33,000
Foreign Currency Units (Skr) 33,000
Pay foreign currency units to exchange broker for foward payable contract.

Cash 33,400
Dollars Receivable from Exchange Broker ($) 33,400
Receive U.S. dollars in accordance with rate established in forward exchange contract.
b. Effects on net income:

Use of forward contract:

1) Dollar strengthned from April 20 to June 19

Exchange loss of $1,000 on foreign
currency receivable
Exchange gain of $400 for foreign
currency payable to exchange broker
therefore, net effect loss $(600)

If Aman had not acquired the forward contract:

1) Dollar strengthned resulting in

exchange loss of $1,000 on
foreign currency receivable
from customer (1,000)
Difference $(400)

Hedging with the forward exchange contract resulted in $400 less changed to net income; thus,
net income was higher as a result of acquiring the forward contract.