Question
In: Accounting
Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...
Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country of Camerrand. The denomination of all transactions with these companies is alaries (AL), the Camerrand currency. During 2017, Benjamin acquires 20,000 widgets at a price of 8 alaries per widget. It will pay for them when it sells them. Currency exchange rates for 1 AL are as follows: September 1, 2017 $0.46 December 1, 2017 0.44 December 31, 2017 0.48 March 1, 2018 0.45 Assume that Benjamin acquired the widgets on December 1, 2017, and made payment on March 1, 2018. What is the effect of the exchange rate fluctuations on reported income in 2017 and in 2018? Assume that Benjamin acquired the widgets on September 1, 2017, and made payment on December 1, 2017. What is the effect of the exchange rate fluctuations on reported income in 2017? Assume that Benjamin acquired the widgets on September 1, 2017, and made payment on March 1, 2018. What is the effect of the exchange rate fluctuations on reported income in 2017 and in 2018?
Solutions
Expert Solution
| Widgets | 20000 | |||||
| Price | 8 AL / Widgets | |||||
| Currency Exchange Rates | ||||||
| 1-Sep-17 | 1 AL | $0.46 | ||||
| 1-Dec-17 | 1 AL | $0.44 | ||||
| 31-Dec-17 | 1 AL | $0.48 | ||||
| 1-Mar-18 | 1 AL | $0.45 | ||||
| IF 1 Dec 2017 Buy and 1 March 2018 payment | ||||||
| Purchase cost | 8*.44*20000 | $ 70,400 | ||||
| Payable | $ 70,400 | |||||
| Treatment on 31 Dec | 8*.48*20000 | $ 76,800 | ||||
| Unrealized Exchange Loss in 2017 | 76800 - 70400 | $ 6,400 | ||||
| Payment | 8*.45*20000 | $ 72,000 | ||||
| Exchange Gain | 72000-76800 | $ 4,800 | ||||
| Net Exchange Loss in 2018 | $ 6400 - $ 4800 | $ 1,600 | ||||
| IF 1 Sec 2017 Buy and 1 Dec 2017 payment | ||||||
| Purchase cost | 8*.46*20000 | $ 73,600 | ||||
| Payable | $ 73,600 | |||||
| Payment | 8*.44*20000 | $ 70,400 | ||||
| Exchange Gain in 2017 | 73600-70400 | $ 3,200 | ||||
| IF 1 Sec 2017 Buy and 1 Mar 2018 payment | ||||||
| Purchase cost | 8*.46*20000 | $ 73,600 | ||||
| Payable | $ 73,600 | |||||
| Treatment on 31 Dec | 8*.48*20000 | $ 76,800 | ||||
| Unrealized Exchange Loss in 2017 | 76800 - 73600 | $ 3,200 | ||||
| Payment | 8*.45*20000 | $ 72,000 | ||||
| Exchange Gain | 72000-76800 | $ 4,800 | ||||
| Net Exchange Gain in 2018 | $ 4800 -$ 3200 | $ 1,600 | ||||
ekkarill92 answered 1 year agoRelated Solutions
Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...
Benjamin, Inc., operates an export/import business. The company
has considerable dealings with companies in the country of
Camerrand. The denomination of all transactions with these
companies is alaries (AL), the Camerrand currency. During 2017,
Benjamin acquires 39,000 widgets at a price of 8 alaries per
widget. It will pay for them when it sells them. Currency exchange
rates for 1 AL are as follows:
September 1, 2017
$
0.47
December 1, 2017
0.43
December 31, 2017
0.49
March 1, 2018...
Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...
Benjamin, Inc., operates an export/import business. The company
has considerable dealings with companies in the country of
Camerrand. The denomination of all transactions with these
companies is alaries (AL), the Camerrand currency. During 2017,
Benjamin acquires 45,000 widgets at a price of 8 alaries per
widget. It will pay for them when it sells them. Currency exchange
rates for 1 AL are as follows:
September 1, 2017
$
0.48
December 1, 2017
0.42
December 31, 2017
0.50
March 1, 2018...
Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...
Benjamin, Inc., operates an export/import business. The company
has considerable dealings with companies in the country of
Camerrand. The denomination of all transactions with these
companies is alaries (AL), the Camerrand currency. During 2015,
Benjamin acquires 20,000 widgets at a price of 8 alaries per
widget. It will pay for them when it sells them. Currency exchange
rates for 1 AL are as follows:
September 1,
2015
$
0.46
December 1,
2015
0.44
December 31,
2015
0.48
March 1, 2016...
Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...
Benjamin, Inc., operates an export/import business. The company
has considerable dealings with companies in the country of
Camerrand. The denomination of all transactions with these
companies is alaries (AL), the Camerrand currency. During 2017,
Benjamin acquires 22,000 widgets at a price of 8 alaries per
widget. It will pay for them when it sells them. Currency exchange
rates for 1 AL are as follows:
September 1, 2017
$
0.48
December 1, 2017
0.42
December 31, 2017
0.50
March 1, 2018...
Incorporationg Social Responsibility into import / export company
Incorporationg Social Responsibility into import / export
company
When should a country export goods and when should a country import goods When do you...
When should a country export goods and when should a country
import goods
When do you think tariffs and or quotas should be put in
place?
Do you think President Trumps strict trade policies will benefit
the country and why
Country Analysis Selected Country: UNITED ARAB EMIRATES (UAE) International Trade and Investments: Export and Import, Trading...
Country Analysis
Selected Country: UNITED ARAB EMIRATES
(UAE)
International Trade and Investments:
Export and Import, Trading partners
Balance of payments
FDI
Global economic Integration
Openness, participation in trading blocs
Protectionism: Tariffs and quotas WTO membership
Economic challenges: Identify and discuss at least 2
economic challenges (defined broadly) faced by the country. Is the
country taking any steps to address the problems?
Summary about growth outlook
.
Note: Please do not copy paste plagiarism is
prohibited
1.Who can conduct import or export of goods in a country according to the relevant domestic...
1.Who can conduct import or export of goods in a country
according to the relevant domestic law? Please list the parties
that may be involved in international sale transaction.
How to repair the economy of the country after COVID-19. Explain export, import, and unemployment
How to repair the economy of the country after COVID-19. Explain
export, import, and unemployment
8. In regards to Brazil - how did the country end up with their import/export structure...
8.
In regards to Brazil - how did the country end up with their
import/export structure and how they detected their comparative
advantage; mention how their terms of trade changed over
time.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- 3) You are rolling a 12 sided die 8 times. a) What is the size for...
- explain the difference between quantitative and qualitative research strategies. Provide an example of a crime based...
- use postorder and inorder tree traversals to make preorder traversal. #!/usr/bin/env python3 # encoding: UTF-8 """Turning...
- 1. Write an if-else statement to describe an object. Print "Balloon" if isBalloon is true and...
- An investor is considering purchasing a Treasury bond with a 20 year maturity, an 8% coupon...
- Write a program that copies the contents of one file to a destination file. This program...
- how to conduct a marketing mix for 3d crest white strips
ADVERTISEMENT