Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Part I

On August 1, 2008, William signed the non cancellable order to purchase machine from a company located in Japan. The contracted price was 6,000,000 yen, payable on January 31, 2009. The machine would be delivered to William on November 1, 2008.

In order to hedge against strengthening of the yen, William entered into forward exchange contract on August 1, 2008, to purchase 6,000,000 yen on January 31, 2009.

On November 1, 2008, the transaction date, the U.S. company received machine from the Japanese company. Spot and forward exchange rates on various dates follow:

                              Spot Rate  ($/1 yen)              Forward Exchange   Rate ($/1 yen)
                                  
                         
August 1, 2008              $0.0080                                        $0.0084
November 1, 2008          $0.0085                                        $0.0087
December 31, 2008        $0.0083                                         $0.0086
January 31, 2009            $0.0090

Prepare all journal entries in Microsoft Excel for William that pertains to acquisition of the machine and the forward exchange contract. Suppose a December 31 year-end.

Part II

As the international aspects of William’s business continue to expand, William purchases a controlling interest in Parisian Co., a French company located in Paris. Parisian has the euro as its local currency.

Your manager is vaguely aware that designation of functional currency for Parisian might have significant and potentially different consequences for the consolidated financial statements of the parent company and its foreign subsidiaries. Being mindful of the bottom line, your manager makes it clear to you that he or she will strongly prefer that you select the functional currency which will be likely to have the most favourable (or least negative) potential impact on consolidated net income.

Address the following specific points:

In which currency would the year-end consolidated financial statements be prepared?

Will the financial statements be translated or remeasured? How will you determine this? Describe the rationale for your answer.

How will an asset such as Buildings be accounted for using each method (translation vs. remeasurement)?

Provide succinct but complete communication and avoid the use of accounting jargon given the nature of the audience.

Cite any sources you use using the correct APA format on a separate page.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M93732

Have any Question? 


Related Questions in Basic Finance

1 compare and contrast the role of the forecast support

1. Compare and contrast the role of the forecast support system, forecast technique, and forecast process. 2. Compare and contrast the basic logic differentiator of time series and causal forecast techniques. Under what ...

1 for the government-wide statements governmental

1. For the government-wide statements, governmental activities are to be presented separately from the financial statements of business-type activities. Give one example of a governmental activity and one example of a bu ...

Briefly describe each of the following developments in

Briefly describe each of the following developments in accounts payable and disbursements. a. Integrated accounts payable b. Purchasing/procurement cards c. Imaging services d. Fraud prevention in disbursements.

1 is the presentation of a personal income statement

1. Is the presentation of a personal income statement appropriate? 2. GAAP as they apply to personal financial statements use the cash basis. Comment. 3. Is the concept of working capital used with personal financial sta ...

Diversification- videosgo to wwwcnbccom and explore the

DIVERSIFICATION- VIDEOS Go to www.cnbc.com and explore the video tab using the key term diversification. As you learned in this unit, there are various sources of information. 1) Watch at least three videos you find, 2) ...

A video posted to the wall street journals web site in

A video posted to the Wall Street Journal's Web site in mid-2010 was titled "Equities May Have Rallied Too Much, Buy Puts." a. What are equities? b. What does it mean that "equities may have rallied too much"? c. If equi ...

1 what are time-series research designs and how are they

1. What are time-series research designs, and how are they used to learn about changes in behavior over time? 2. What types of independent variables can be used in participant-variable research designs, and what conclusi ...

Consider a borrowing arrangement in which the annual

Consider a borrowing arrangement in which the annual percentage rate (APR) is 8%. a. Under what conditions does the effective annual rate of interest (EAR) differ from the APR of 8%? b. As the frequency of compounding in ...

Selecting a bank veronica plans to open a checking account

Selecting a Bank. Veronica plans to open a checking account with her $1,200 tax refund check. She believes she can maintain a $500 minimum balance. Also, she estimates that she will write 10 checks per month and will use ...

Assignment capital investments in emerging marketsuse the

Assignment: Capital Investments in Emerging Markets Use the Internet and/or Strayer Learning Resource Center to research a global manufacturing company of your choice. Review the current plans that your selected company ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro