Name: Cabahug, Rizalyn O.

Year/Section: 3rd – 4FM-3

Assignment-Lesson 4: Global Finance & Electronic Banking

w/ International Seminar
As the financial manager of a US based company, you are evaluating the investing
potential in the Philippines. The CEO of the company tasked you to evaluate the likelihood
of the success of this plan and asked you to evaluate the foreign currency exposures and
you consider the country’s reserve as one of the determinants of the foreign exchange.
Use the following international transactions of the Philippines to other countries and
classify each transaction by using the format below if it is CURRENT ACCOUNT (Debit or
Credit) or CAPITAL/FINANCIAL ACCOUNT (Debit or Credit). Please indicate the account
title of each transaction and write the amount of the transaction in the corresponding
column given below. You can use the latest BOP released as a guide for your analysis in
what account title to use.

Then Prepare the Balance of Payments of the Philippines in a good format.

a. Wal-Mart import prawns and crabs from Pampanga amounting to $5,000.
b. Jinky Pacquiao purchased Hermes and Louie Vitton bags in US amounting to
$15,000.
c. A Japanese tourist purchased mangoes from a farmer in Pangasinan amounting to
$10,000.
d. BTS spent their summer vacation in Bohol. They stayed in Bohol International Hotel
and spent $20,000.
e. Chavit Singson and his party stayed in Nevada hotel during the recent fight of Manny
Pacquiao with Bradley and spent $25,000.
f. Manny Pacquiao earned $1 million in his fight with Brandon Rios in US.
g. PLDT pays $5,000 to foreign investor as dividend in his investment in the company.
h. Pepito Cruz received $10,000 as a remittance of his OFW mom working in Canada.
i. A British Company invested $1 million in a new plant in UP-Ayala Techno Hub.
j. IBM invested $1.5 million in its IT expansion business in Subic.
k. Gerry’s Grill invested $1 million in the newly open store in Singapore.
l. Henry Sy invested $5 million in the SM Mall-Hong Kong.
m. SMC issued $1 million Samurai bonds.
n. A US national invested $1 million RP bonds.
o. A Japanese national purchased $1 million mutual fund in local BDO Equity Fund.

BALANCE SHEET

Current
Account Title Account Capital Account
Debit Credit Debit Credit

a. Inventory 5,000
b. Purchases 5,000
c. Purchases 10,000
d. Vacation Expenses 10,000
e. Accommodation Expenses 25,000
f. Income 1,000,000
g. Cash Dividends Payable 5,000
h. Remittance 10,000
i. British Company, Investment 1,000,000
j. IBM Investment 1,500,000
k. Gerry's Grill, Investment 1,000,000
l. Henry Sy, Investment 5,000,000
m. Cash 1,000,000
n. US, Investments 1,000,000
o. Mutual Funds Puchases 1,000,000