Chapter 19 Problem I 1. Indirect Exchange Rates Philippine Viewpoint: 1 $= P40; 1 Peso = $0.025 (61/P40} 1 Singapore dollar= P3200; 1 Peso = 0.03125 Singapore [I Singapore Dollar/P32) Peso PB000 _ 2 FOU Direct Exchange Rate = P4000 $200; or = PB,000 x $1/P40 = $200 3 4,000 Singapore dollars x P32 = P128,000 Problem Il a. Exchange rates: Arrival Date Departure Date 1 Singapore dollar= P33.00 1 Singapore Dollar= P3250 Direct Exchange Rate (P33,000 / 1,000 Singapore (3,250 / 100 Singapore dollars) dolla) P1.00= 03 Singapore dollars | P1.00=.03 Singapore dollars Indirect Exchange Rate (1,000 Singapore dollars / (100 Singapore dollars / 33,000) P3,250)) 2. The direct exchange rate has decreased. Ths means that the peso has strengthened during Mr. All's vsit. For example, upon arrival, Mr. Alt had to pay P33. per each dollar. Upon departure, however, each dollar is worth just P32.50. This means that the relative valve of the peso has increased ot, altetnatively, the valve of the dollarhas decreased 3. The Philippine peso equivalent valves for the 100 Singapore dollars are: Arrival date 100 dollars x P33.00 = 3,300 Departure date 100 dollars x P32.50 = 3,250 Foreign Currency Transaction Loss B_50 Mr. Alt held dollars for a fime in which the dolla was weakening against the peso. Thus, Mr. Alt experienced a loss by holding the weaker currency,Problem Ill 1. If the direct exchange rate increases, the peso weakens relative to the foreign currency unit. If the indirect exchange rate increases, the peso strengthens relative to the foreign currency unit. 2 Settlement Direct Exchange Rate Indirect Exchange Rate _Transaction Currency Increases _Decreases_ _Increases_ _ Decreases Importing Peso NA NA NA NA, Importing L G G L Lcu Exporting Peso NA NA NA NA. Exporting Leu G L L G Problem V 1 December 1, 20x4 (Iransaction date) Purchases 75200 ‘Accounts payable ($24,000 x P40 55). F73200 December31, 20x4 (Balance sheet date) Foreign curency transaction lett 5000 ‘Accounts payable [$24,000 x (P40 60 — P40 55)] 6000 ‘Accounts payable valved af 12/31 Balance Sheet ($24,000 x P40 80). 979,200 ‘Kécounts payable valved af 12/1 Date of Transaction ($24,000 x P40 55). 973,200 ‘Agusiment te accounts payable needed. P6000 March 1, 20x5 (Settlement date) Accounls payable. 7200 Foreign cunency Transaction gain 924000 x (PAO B0 - PAST] 50 [ces (924,000 x Fa 65) I [975,600] a1. None - transaction date (December 1, 20x4) 1.2. P6,000 loss 1.3. P3,600 gain (March 1, 20x5) b b.1. P979,200 - spot rate on the balance sheet date or current rate on the balance sheet b.2. P973,200 - spot rate on the transaction date orhistorical rate on the balance sheet date. Problem V 1. December 1, 20x4 (Transaction date) [Accounts receivable ($60,000 x P40 00). [2,400,000 T | [Setes I [290,000 |December31, 20x4 (Balance sheet date) ‘Accounts receivable. 2,000 Foreign currency transaction gain [940,000 x [P40.70 - PO.00]] 000 ‘Accounts receivable valved af 12/31 Balance Sheet ($40,000 x P40.70). 2,442,000 ‘Aecounts receivable valved af 12/1 Date of Transaction ($60,000 x P49 00). 2,400,000 ‘Agusiment fe accounls receivable needed March 1, 20x5 (Settlement date) ‘Cash [$60,000 x Pa0,60) 7436,000 Foreign curency transaction lest 000 ‘Accounts receivable (§ 60,000 x P40.70] ZAAT 000 @.1. None - transaction date @.2. P42,000 gain 14.3. P6,000 loss (March 1, 20x5) b b.1. P2,442,000 ~ spot rate on the balance sheet date or current rate on the balance sheet b.2. P973,200 - spot rate on the transaction date or historical rate on the balance sheet date. Problem VI The entries to record these transactions and the effects of changes in exchange rates are 9s follows November 1, 20x4 (Transaction date} Equity investment (FVTPL/Rnancial Asset F840 000 Cosh 5840 000 To record the purchave of share: h Preapple Computer ata costo $96,000 at the exchange rate of P40 December 10, 20x4 (Transaction date) Equipment 6000 Cosh 58000 To record the purchate oF equipment coring 12000 euros ae exchange rate of P53 December31, 20x4 (Balance sheet date) Equity investment (FVIPL//Rnancial Asset 1,020,000 Unrealzed ganin far valve of equity investment financial arvel) 1/020,000 To record gainin far valve of Pineapple Computer's share T2/S1/x# Revalved Investment and vanslated al the rate on the date of revalvation (closing/ current rate) (1.200 units x §100_x P40.50), 4,840,000 TI7I 7x Investment, cost (1.200 unis x $80 x P40 00) 3,840,000 Unrealized gan on equity investment 1,020,000 Tess: Foreign cuwency transaction gan-equiyinvesiment [| +dTI71/20x4: Date of transaction (1.200 onits x $80 x PaO) [_P31840,000 Less: 12/31/20x4: B/S Date {1,200 units x $80 x P40.50). 3,588,000 | 8000 ‘Giher unreaized ganin the fair valve of equity investment. 372.000 Foreign cumency transaction less 19.200 ‘Accounts payable ($96,000 x (PS3.20 ~ P53)] 19200 To record exchange lois on account payable i euros ‘Accounts payable valved af 12/31 Balance Sheet (1.200 x $80 x PS3.20), 5.107.200 ‘Kécounts payable valved af 12/1 Date f Transaction (1.200 x $80 x P53.00), 5,088,000 ‘Agusiment te accounts payable needed. E_ 19.200 February 3, 20%5 [Settlement date) ‘Accounts payable. 5107-200 Foreign currency transaction loss [§96000 x (PS3 80 —P53.20)] 57,600 Cosh ($96.000 x PS3.80) E1600 To record exchange loss on account’ payable in cures and settemantor account payable in euror atthe spotrate of P5380. Note the following: + The investment in Pineapple Computers, Inc shares = @ non-monetary item that & caried at fair valve as itis classified as equily investment through profit or loss (or @ financial asset ~ FVIPL refer PFRS 9). The investment is revalved and translated at the rate on the date of revaluation, that &, December 3l, 20x4 The equipment is translated at the spot rate at the date of purchase and, being a non-monetary item, & carried at cost. It & not adjusted for the change in the exchange rate at balance sheet date. The accounts payable in euros is a monetary item and is remeasvred using the current/closing rate at balance sheet date. The exchange loss is expensed off to the income statement Problem VII 1. May! Inventory (or Purchases) 8,400 Accounts Payable 8,400 Foreign purchase denominated in pesos June20 Accounts Payable 8,400 Cash 8,400 Settle payable. Joly Accounts Receivable 10,000 Soles 10,000 Foreign sale denominated in pesos August 10 Cash 10,000 Accounts Receivable 10,000 Collect receivable. 2 May! Inventory (or Purchases) 8,400 Accounts Payable (FC!) 8,400 Foreign purchase denominated in yen 8,400 / P.0070 = FC! 1,200,000June 20 Foreign Currency Transaction Loss 600 Accounts Payable (FC!) 600 Revalve foreign currency payable to peso equivalent valve: FCI 1,200,000 x P.0075 June 20 spot rate FCI 1,200,000 x P.0070 May | spot rate FCI 1,200,000 x (P.0075 - P0070) Accounts Payable (FC!) 9,000 Foreign Cutrency Units (FCI) 9,000 Settle payable denominated in FC1 Joly Accounts Receivable (FC2) 10,000 Soles 10,000 Foreign sale denominated in foreign currency 2 (fC 2) FC3: P10,000 / P.20 = FC2 50,000 August 10 Accounts Receivable (FC2) 1,000 Foreign Currency Transaction Gain 1,000 Revalve foreign currency receivable to US. dollar equivalent valve: P11,000 = FC2 50,000 x P.22 Aug. 10 spot rate = 10,000 = FC2 50,000 x P.20 July | spot rate P_LQQQ = FC2 50,000 x (P.22- P.20) Foreign Currency Units (C2) 11,000 Accounts Receivable (FC2 11,000 Receive FC 2 insetflement of receivable Problem VII 1. Denominated in FC RR Imporls reports in Philippine pesos: 12/ pea 12/31 xa 18/5 Transaction Balance Sheet Settlement Date Date Date Direct Exchange P70 Pes P68 Rate 2. December !, 20x4 Inventory (or Purchases) 10,500 Accounts Payable (FC) 10,500 10,500 = FC 15,000 x P.70 December31, 20x4 Accounts Payable (FC) 600 Foreign Currency Transaction Gain 600 Revalve foreign currency payable to eavivalent peso valve'C 15,000 x P.66 Dec. 31 spot rate ‘C 15,000 x P.70 Dec. | spot rate ‘C 15,000 x (P.66 - P.70) Janvary 15, 20x5 Foreign Currency Transaction Loss Accounts Payable (FC) Revalue payable to current peso equivalent P10,200 = FC 15,000 x P.68 Jan. 15, 20x, valve C 15,000 x P.6 Dec. 31, 20x4, valve C 15,000 x (P.68 - P.66) Accounts Payable (FC) Foreign Currency Units (FC) P10,200= FC 15,000 x P.68 Accounts Payable (FC) 300 300 10,200 10,200 (FC 15,000 xP. 70) 00, (FC 15,000 x P.66) ALE 12/314 (FC 15,000 x P.68) 10,200 1/15/x5 Settlement Problem X 1. December31, 20x Accounts Receivable (FC1) Foreign Currency Transaction Gain Adjust receivable denominated in FCI to current peso equivalent and recognize exchange gain 83,600 = FC475,000 x P.1 74 Dec. 31 spot rate + 73,600 = Preadjusted Dec. 31, 20x6, valve P10,000 Accounts Payable (C2) Foreign Currency Transaction Gain Adjvst payable denominated in foreign currency to current peso equivalent and recognize exchange gain. P175,300 = Preadjusted Dec. 31, 20x6, valve ToT Te Bal 12/31 /x4 ALE ISS Bal 1/15) x5 Bal 1/16/x5 10,000 10,000 5,200 5,200 = 170,100 = FC2 21,000,000 x P0081, Dec. 31 spot rate P_5.200 2. Accounts Receivable (FC1) Foreign Currency Transaction Gain Adjust receivable denominated in FC1 to equivalent peso valve on settlement date: 1,900 1,900 PB5,500 = FCI 475,000 x P.180 20x7 collection date valve 83,600 = FCI 475,000 x P.176 Dec. 31, 20x4, spot rate P_1,200 = FCI 475,000 x (P.180 - P.1 76)Cash Foreign Cutrency Units (FCI) Accounts Receivable (FCI) Accounts Receivable (P) Collect all accounts receivable 3. Accounts Payable (C2) Foreign Currency Transaction Gain Adjust payable to equivalent peso valve on settlement date: Accounts Payable (P) Accounts Payable (C2) Foreign Currency Units (FC2) Cash Payment of all accounts payable 4. Transaction gain on FC December31, 20x6 December31, 20x7 Overall 5. Transaction gain on FC2 December31, 20xé December31, 20x7 Overall 6 Overall foreign currency transactions gain: Gain on FCI transaction Gain on FC2 transaction FC2 21,000,000 x P.0078 20x7 payment date valve FC2 21,000,000 x P.0081 Dec. 31, 20x6, spot rate P__4.200 = FC2 21,000,000 x (P0078 - P.008!) P10,000 1,900 P 5,200 6.300 B1L.500 P11,900 11,500 23.400 164,000, 85,500 6,300 86,000 163,800 gain gain gain gain gain gain 85,500 164,000, 6300 163,800 86,000 CDL could have hedged its exposed position. The exposed positions ate only those denominated in foreign currency unils. The accounts receivable denominated in FCI could be hedged by selling FCI in the forward market, thereby locking in the valve of the FCI. The accounts payable denominated in FC2 could be hedged by buying FC2 in the forward market, thereby locking in the valve of the FC2. Problem X Account Accounts Receivable _Pavable Case! NA P16,000La Case2 ———P38,0004« NA Coxe NA £27,0001e! Case 4 76,250 NA Foreign Currency Transaction Exchange Loss NA NA P3,000 (6) 1,250 (h] Foreign Currency Transaction Exchange Gain 22,0006 22,0001 NA NA(a) LCU 40,000 x P.40 (b) LCU 40,000 x (P.40- P.45) fc] LCU 20,000 x P1.90 (d)LCU 20,000 x (P1.90- P1.60) (e) LCU 30,000 x P90 {fl LCU 30,000 x (P.90- P.60) (g) LCU 2,500,000 x P.0025 (h) LC 2,500,000 x (P.0025 - P.003) Multiple Choice Problems 1. © C$I/ P90 (C§1.11 = P1090) 2 4 20x4 20x5 P4895 x FC30,000 Pi4e85 P4845 x FC30000 —F14,535 P.4B45 x FC30,000 14535 P.4945 x FC30,000 14.835 Gain 150 Loss B_ (309) 2b 20x4 Date of ransaction (12/1/20x4) P0095) Balance sheet date (12/31 /20x4) 0098) Foreign exchange currency less per FC P0001, ‘Mutipied by: No_of FC 7,000,000) Foreign exchange cunency loss - 100 20x5 Balance shee date (12/31 /20x4) P0096 Date of settlement (1/10/20x5) 0094 Foreign exchange currency gain per FC. P0002, ‘Mutipled by: No.of FC 7,000,000) Foreign exchange eunency gain 200 4 Balance sheet date (12/31 /20x4) 125,000 Date of settlement (7/1/20x8) 140,000 Foreign exchange currency loss £15,000 5b Janvary 15 Foreign Currency Units (LCU) 300,000 Exchange Loss 15,000 ‘Accounts Receivable (LCU) 315,000 Collect foreign currency receivable and recognize foreign currency transaction loss for changes in exchange rates 300,000 315,000 = Dec. 31 Peso equivalent (LCU 900,000 / LCU3) Jan. 15 valve P_15,000 Foreign currency transaction loss 6. ¢~spotrate on the date of transaction 7. a~ spot tate on the date of transaction 8 d — P120,000 140,000 July 1, 20x4, Peso equivalent valve December31, 20x4, Peso equivalent valve (LCU 840,000 / P1 40,000) = LCU6 / PI -105,000 = July 1, 20x5, Peso equivalent value (LCU 840,000 / 8) = P105,000 135,000) Foreign currency transaction loss,9. d P27,000 = P6,000 + P20,000 + P1,000 Accounts Pay fable (ECU) T 172014 | ALE I 3/20/x4 Foreign Exchange Loss 6,000 Accounts Payable (FCU) 6,000 Notes Payable (FCU) 7IO1Tx& 500,000 AJE 20,000 12/314 30,000 Foreign Exchange Loss 20,000 Notes Payable (FCU) 20,000 Interest Payable (FCU) (FCUS0,000% T0xT/2yead 25000 ALE 12/3x4 Interest expense 25,000 Interest Payable (FCU) 25,000 Foreign Exchange Loss 1,000 Interest Payable (FCU) 1,000 10. © P5,000 Accounts Receivable (FCU) TO/1S/x4 100,000 AIE 5,000 11/164 195,000 | Settlement 1/16/x4— 108,000 Accounts Receivable (FCU) 5,000 Foreign Exchange Gain 5,000 Note: The receivable & recorded 01 1 October 15, 20x4, when the goods were shipped, not on September, 20x4, when the order was received 11. b P1,000 Accounts Payable (FCU) (10,000 x P40} A108) x4 6,000 x4 AIE 500 (10,000 x P.55) 12/31 fxd 5,500 XS AJE 1,000 (10,000 x P45) 3/01 1x5 4,500 Settlement 4,500 Bal XS AJE Accounts Payable (FCU) 1,000 Foreign Exchange Gain 1,00012. b — P9,000 = 300,000 FCUs x (P1.65 - PI.62). The foreign currency transaction gain is computed using spot rates on the transaction date (November 30, 20x4) and the balance sheet date [December 31, 20x4). The forward exchange rates are not used because the transaction was not hedged. 13. ¢- Date of ransachon (771 P08 Balance sheet date (8/31) 2.05 Foreign exchange cunency gain per FCU P03 ‘uilled by: No.of FOU. 350,000, Foreign exchange eunency gain E 10.500 14. b—The valve of the asset acquired should be the spot rate on the date of transaction, ie P-80. Therefore, the final recorded valve of the electric generator should be P40,000 (P.80 x 150,000 FCs) 15.4 Date of raniaction P75 Date of settlement 50, Foreign exchange currency gain per FOU P05 Mulipled by: No. of FCU 700,000, Foreign exchange eunency gain F_10,000) led Date of rantaction (12715) Pe Balance sheet date (12/31) 65 Foreign exchange currency gain pet FOU. P05 Mulipled by: No. of FCU 80,000 Foreign exchange eunency gain E4000 17.b Date of ransaction (11/30) Pe Balance sheet date (12/31) 162 Foreign exchange currency gain pet FOU P03 Mufipled by: No. of FCU 300,000) Foreign exchange eunency gain P9000 18.b Date of frantaction (11/30) Pe Balance sheet date (12/31) Las Foreign exchange currency gain pet FOU. P04 Mulipled by: No. of FCU 500,000, Foreign exchange cunency gain F_ 20.000 19.4 Date of arival [P1000 7 480,000 FC) P0208 Date of deparivre (P100/50,000 FC) '00200 Foreign exchange cunency loss per FCU. 00008 Mulipled by: No. of FCU 50,000 Foreign exchange currency loss Et 20. b [Date of ransaction 1071) TF 120]2d 2a Ba 24. d 25. ¢ 27.4 Balance sheet date 12/31] Te Foreign exchange cunency gan per LGU F_10 Mutipied by: No. of CU 5000 Foteign exchange currency gan E500 Date of hansaction (1172) P18 Balance sheet date (12/31) Lio Foreign exchange cunency gan perICU P02 Muhipled by: Ne. of CU 733000 [Feteign exchange curency gan [FF 4 Date of transaction (973) P17,000 7 P85 =20,000 FC P85 Date of seflement (10/10) 50, Foreign exchange cunency loss per FC Fos Mufipled by: No. of FC 703000 Foreign exchange cumency lew F_1.000 Date of hansaction (12/5) P2765 Balance sheet date (12/31) 262 Foreign exchange cunency gan pet FC F003 Mufipled by: No. of FC 100.900 Foteign exchange currency gan B_ 300 Balance sheet date (12/31) P_ 2a Date of settlement (1/10) 264 Foreign exchange cunency less per FC F002 Mutipled by: No. of FC 190,000 Foteign exchange cumency om P_200 Foreign exchange cunency gan (Ne_25] F300 Foteign exchange cunency less (No. 26) 200 [Overall gan. net [Fico Date of transaction (12/5) 265 Date of setflement (1/10) 264 Foteign exchange cunency gain per FG F001 Mufipled by: No. of FC 700,900 Foteign exchange curency gan 100 26 b - any gain or loss on foreign currency should be considered ordinary Pigskin, o Philippine Corporation Date of fransaction (4/8) PI /.65 FC (arect avete) P54 Date of settlement (5/8). PI/_70 FC [arect avete] 1a Foreign exchange cunency Toss per FC Fit Mufipled by: No. of Fc 35000 Foreign exchange cumency lew E385028. d-the amount of sales should be the spot rate on the date of transaction (or the balance 2. 31 sheet date - historical rate). Le, Pl 7241 x 10,000 FCs = PI 7,241 1/1: Date of ransaction —spot rate Piz 12/31 Balance sheet date. T3162 Foreign exchange currency gain per FC. P0941 ‘Mutipied by: No_of FC 79,000 Foreign exchange cunency gain ZT b Balance sheet date (12/31 /20x4) P_ 18162 Date of settlement (1/30/20x5) 1.6866 Foreign exchange currency less perFC F516 ‘Mutipled by: No.of FC 79,000 Foreign exchange currency loss Ese a -since accounts payable is an exposed account meaning their valve will fluctuate based May 8, ie, the spot rate of PI 25 (P.15 x 2,000,000 FCs = P2,500,000) ‘on the spot exchange rates, the value of the accounts payable should be the valve on Be 3/8: Date of ransachion—spet rate P1285 S/31- Balance sheet date 128 Foreign exchange cunency loss per FC F001 ‘Mutipied by: No_of FC 000,000 Foreign exchange cunency loss E20.000 33. € - in a two-transaction approach, the recognition of foreign exchange gain or loss is Bho Balance sheet date (12/31/20x4) P5000 Date of settlement (3/2/20x8] 5900 Foreign exchange currency loss PL100 35.4 ‘Ga]a0xs. Date of Hransaction F 97,000 12/31/20x3: Balance sheet date 703,000 Foreign exchange currency less E5000 6.4 Balance sheet date (12/31/2033) P103,000 Date of settlement (4/2/20x4) 105,000 Foreign exchange currency loss P_ 2.000 a7. d TI74Ixé Date of hansaction spot rate P75 T2//31/x6: Balance sheet date o7 Foreign exchange currency less per FC P03 ‘Mutipled by: No.of FC 700,000 E3000 should be the spot rate on the settlement date, ie,, Pl 20 (PI.20 x 2,000,0¢ separate from the settlement, therefore, the amount of accounts payable to be seltled 100 FCs = P2,400,000) Foreign exchange curency [oss38d To/Sxé Date of hans action spot rate P80 T2//31/x6: Balance sheet date 84 Foreign exchange currency less per FC P0048 ‘Mutipied by: No_of FC 700,000 Foreign exchange cunency [oss F400 wb Income statement: 12/20/x6: Date of transaction spot tale P78 T2//31/x6: Balance sheet date 75 Foreign exchange cunency gain per FC. F003 ‘Mutipled by: No. of FC 7,000,000 Foreign exchange cunency gain PB __ 3,000 Balance sheet: Inventory should be spot rate on the transaction date: P.798 x 1,000,000 = P798,000 40.4 Income statement 12/18/x6: Date of ransaction spor rate P17 T2//31/x6: Balance sheet date 180 Foreign exchange currency less per FC P0001 ‘Mutipled by: No.of FC 1/000,000, Foreign exchange curency [oss E1000 Sales should be spot rate on the transaction date: P.181 x 1,000,000 = P181,000 41. b - 70,000 x P.65 42. b - 70,000 x P.65 43, a - 70,000 x P.72 44, c - 70,000 x (P.72- P68) 5. b - 70,000 x (P.69- P.72) 46, d- 25,000 xP1.14 47. b - 25,000 x PI 06 48. a - 25,000 [P1.14- P1.06) 49. d - 25,000 [P1.06 - P1.09) 50. d spot rate on the date of setflement 51. b~spot rate on the date of purchase/ transaction 52. b - spot rate on the date of transaction 53. a ~ refer to page 646 of the book for the discussion of “one-transaction theory" 54. c ~ (P.82~P.82) x 1,000 FCUs 55. No answer available - PS exchange gain = (P.81 ~ P.6050) x 1,000 FCUs 56. b ~spot rate on the date of transaction loan date] ~ 5,000,000 x P1150 57. d~spot rate on the balance sheet date — (5,000,000 x 58) x P1.1490 5B. a ~ (PI.15~P1.149} x 5,000,000 = PS,000 gain 59. d—spot rate on the date of transaction loan date} ~ (5,000,000 x 5%) x P1.1 485 60. d P78,000/P 80 per FC! P 97,500 P78,000/P.78 per FCU 100,000 Difference in FCU= £2,500)Difference in pesos (2,500) x .78= 61. b - P97,500 franes {from 60 above) x P.78 = P76,050 62. d Indirect exchange rate: for the Singapore dollars: 1/07025 = 1.4235 forthe HK dollars: 1/2.5132= 3979 63. a - HK$10,000 x P2.5132/HK$ = P25,132 64. b - P10,000/P 7025 = 14,235 Singapore dollars Quiz-XIX 1. © P4,000 Accounts Payable (ECU) (200,000 x P4875) 12/1OPx4 ALE 4,000 (200,000 x P.4675) 12/31 /x4 Accounts Payable (FCU) (1.950) Foreign Exchange Gain 4,000 2d P280,000 = July 1, 20x5, Peso equivalent valve =240,000 = December31, 20x4, Peso equivalent valve P_40,000 Foreign currency transaction loss ad 0x4: (P5395 - P.5445) loss x 70,000 FCU = P350 loss 20x5: (P5445 - P5495} loss x 70,000 FCU = P350 loss 4. b - 30,000 x P.67 = P20,100; P20,100 - P20,400 = P300 loss 5b Date of hansaction (73) P1358 Balance sheet dote (8/31) 155 Foreign exchange cunency gan per FOU F903 ‘Miipled by: No. of FOU 375,000 Foteign exchange currency gan £11250 bb Date of ransaction GI] PSI,000 7 PST = 100,000 FC Pal Date of settlement (5/10) 34 Foreign exchange cunency gan per FC P03 ‘Mulipled by: No.of FC 1003000 [Fereign exchange cumency gan, [#3000] 7. P4,000 gain 12/12/x6 Date of hansacton —spet rate P20 12//31/x6 Bolance sheet date 24 Foreign exchange cunency gan per FC F004 ‘Mulipled by: No.of FC 100.000 Foteign exchange curency gan F__ 4900 8. P5,000 gain950K Date of hansactien ~spet rate F_90 12//31/x6 Bolance sheet date 85 Foreign exchange cunency gan per FC F005 ‘Mulipled by: Ne. of FC 190,000 [Feteign exchange curency gan, [E5000] 20x4: (P.5395 ~ P.5445) loss x 70,000 FCU = P50 loss 20x5: (P.5445 - P5495} loss x 70,000 FCU = P3S0 loss 10. P188,500 - spot rate on the date of transaction (date of purchase) ~ 6,500,000 x P0.029 11. P26,000 exchange gain ~ (P0.029 ~ P0.028) x 6,500,000 12. P142,500 - spot rate on the date of settlement ~ P0.025 x 6,500,000 = P162,500 13. PB7,376 ~ spot rate on the date of transaction (date of sale) ~ PI 016 x 86,000 = PB7,376 14, P516 exchange gain = (P1022 - P1016) x 84,000 15. P87,892 - spot rate on the date of settlement 16, P200,000 exchange gain = (P1.50 ~ PI 48) x 10,000,000 FCUs 17. (500,000) exchange loss = (P1 45 - PI 50) x 10,000,000 FCUs 18. P136,920 = spot rate on the date of transaction (P1.1410 x 120,000 FCUs) 19. P137,400 = spot rate on the date of settlement (P1.1450 x 120,000 FCUs) 20. P360 exchange gain = (P1420 - PI 450) x 120,000 FCUs 21. P4BO exchange gain = (P1.1410 - P1150) x 120,000 FCUs 22. 20x3- P1,000 gain; 20x4 - PS00 loss Account payable, Dec 05, 20x3 1,000,000 x PO:1 68 = 168,000 Account payable, Dec 31, 20x3 1,000,000 x PO.167= 147,000 Gain Account payable, Dec 31, 20x38 167,000, Account payable, at settlement 167,500 Realzed loss 00, 23. 180,000 FCUs x (1.60 ~ 1.62) = P(3,000) loss 24, 150,000 FCUs x 1.62 = P243,000 25. P1,042 foreign exchange loss 10/1§/x5 Accounts receivable 16,667 Sales 20,000/P1.2 16,667 12/10/x5_ No entry 12/13/x5 Cash 20,000/P1.28 15,625 Foreign exchange loss 1,042 Accounts receivable 16,667 26. P16,667- refer to No. 25 27. P16,667 2B. ¢ Bc Theories Completion Statements 1. Intemational Accounting Standards Board 2. Intemational Accounting Standards 3. commodities4, conversion 5. translation 6. indirect 7. direct 8. floating, free 9. spot 10. differential rates of inflation 11. purchasing power parity theory 12, denominated 13. measures 14, exposed asset position 15. exposed liability position 16, transaction date 17. bank wire transfers ive ot False/Mulliple Choice 1. [Foke | 6 [Fake [11 |twe ]14 [Fake [2 [Fake [24 [Twe [al [twe [36 [Fake 2 [twe [7 [Twe [12 | Fake | 17 [Twe | 22 [Twe | 27 [Fake [32 [Fake [37 |Twe 3_[Fake | 8 [Fake [13 [Twe [18 [Fake | 23 [Twe | 28 [Fake [23 [Fake [38 [Fake 4 [twe | 9 [Twe [14 | Fake [19 [Fake | 24 [Fake | 29 [Tue [24 [Tue [39 |Twe S_[Fake [10 [Fake [15 |twe [20 [Fake | 25 [Twe | 0. [Fake [35 [Fake [40 [Twe a [Fake [4s [b [Si Je [Ss [a [a le [Sle [A [a [% [bo 42 [twe [47 |b [82 fa [87 fe [a2 1b lé7 le [2]e 17 Je 43_|Fake [48 |d [53 fo [88 fd [63 [a [ale [|e [7 @ 44 [twe [49 |b [54 [> 159 la [ea te le lb [m4 la | |b [4 [ive [50 [a [55 [@ [0 [fe [45 [e [7 [a 75 Te [0 [a A 2 2 [4 [87 |b [92 [a _|97_[o 3 _[¢ [es |b [93 [a [oa [a ea [e [|b [94 [e [99 _[e [4 [90 [a _[95 [eT [100 [a