Consider the exchange rate between the U.S. $ and the U.K. £. Suppose the exchange rate E ∗ is defined as £/$. (a) Denote the one-year forward exchange rate (at time t) for time t+1 by F ∗ t+1. Suppose the nominal interest rate in the U.S. is 8%, the nominal interest rate in the U.K. is 5%, the current exchange rate E ∗ t is £0.67/$, and the forward exchange rate F ∗ t+1 is £0.625/$. Are the numbers given here consistent with the interest rate parity equation? Clearly show all calculations. Based on this information, would you prefer to invest in the U.S. or in the U.K.?
(b) What effect will the difference between the effective rate of return in the two countries (if any) from part (a) have on the exchange rate (E ∗ ). Clearly show all calculations, and illustrate your answer using a well-labeled graph.
(c) Consider the exchange rate determined in part (b). Suppose that the Fed (the U.S. central bank) adopts a policy to lower the inflation rate by 2% in the U.S. Explain the effect of such a monetary policy on the exchange rate (E ∗ ). Clearly explain your answer, and illustrate your answer using a well labeled graph.
In: Economics
6. Throughout the ages countries have implemented impediments to trade. a. What is a tariff? b. Why would the U.S. impose steep tariffs on Chinese solar panels? i. Explain how this would work to accomplish the U.S. objective. c. Given the current trade war with China and other nations, please explain which industries are being hurt by higher tariffs against America, and explain how the customers of those industries are being impacted. Please provide thorough explanations. d. What is an import quota? e. Identify 3 cases where the U.S. has imposed import quotas on another country and explain why they were implemented i. Google can help you. f. What are non-tariff barriers (don’t use embargos or import quotas)? g. Identify 3 examples of non-tariff barriers imposed by the U.S., why they were implemented, and their impact on the U.S. and other countries. i. Google can help you. i. What could happen to the domestic economy of a country when trade barriers are eliminated and why? ii. Explain what would happen to GDP, employment, and national income, and why.
In: Economics
On June 1, Alexander Corporation sold goods to a foreign customer at a price of 1,110,000 pesos and will receive payment in three months on September 1. On June 1, Alexander acquired an option to sell 1,110,000 pesos in three months at a strike price of $0.055. Relevant exchange rates and option premiums for the peso are as follows:
| Date | Spot Rate |
Put Option Premium for September 1 (strike price $0.055) |
||||
| June 1 | $ | 0.055 | $ | 0.0021 | ||
| June 30 | 0.059 | 0.0017 | ||||
| September 1 | 0.054 | N/A | ||||
Alexander must close its books and prepare its second-quarter financial statements on June 30.
a-1. Assuming that Alexander designates the foreign currency option as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.
Record the sale of merchandise.
2
Record the foreign currency option.
3
Record the entry for changes in the exchange rate.
4
Record the change in the fair value of the option.
5
Record the gain or loss on the option.
6
Record the option expense.
7
Record the entry for changes in the exchange rate.
8
Record the change in the fair value of the option.
9
Record the gain or loss on the option.
10
Record the option expense.
11
Record receipt of pesos.
12
Record the exercise of the option.
a-2. What is the impact on net income over the two accounting periods?
b-1. Assuming that Alexander designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.
Record the sale of merchandise.
2
Record the foreign currency option.
3
Record the entry for changes in the exchange rate.
4
Record the change in the fair value of the option.
5
Record the gain or loss on the option.
6
Record the option expense.
7
Record the entry for changes in the exchange rate.
8
Record the change in the fair value of the option.
9
Record the gain or loss on the option.
10
Record the option expense.
11
Record receipt of pesos.
12
Record the exercise of the option.
b-2. What is the impact on net income over the two accounting periods?
In: Accounting
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In: Accounting
Acquired (adaptive) immunity allows the immune system to respond to a large number of antigens with a strong targeted response. Please briefly explain this statement
In: Anatomy and Physiology
Discuss artificially acquired active immunity. Give at least 5
reason why or why not vaccines are a good solution for controlling
infectious diseases.
In: Biology
Is new learning only acquired through classical and operant conditioning? Explain. Provide an example of classical or operant conditioning in your own life.
In: Psychology
In: Nursing
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Question: At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization ac...
At December 31, 2017, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows:
| Category | Plant Asset |
Accumulated Depreciation and Amortization |
|||||
| Land | $ | 180,000 | $ | — | |||
| Buildings | 1,750,000 | 333,900 | |||||
| Machinery and equipment | 1,375,000 | 322,500 | |||||
| Automobiles and trucks | 177,000 | 105,325 | |||||
| Leasehold improvements | 226,000 | 113,000 | |||||
| Land improvements | — | — | |||||
Depreciation methods and useful lives:
Buildings—150% declining balance; 25 years.
Machinery and equipment—Straight line; 10 years.
Automobiles and trucks—150% declining balance; 5 years, all
acquired after 2014.
Leasehold improvements—Straight line.
Land improvements—Straight line.
Depreciation is computed to the nearest month and residual values
are immaterial. Transactions during 2018 and other information:
On January 6, 2018, a plant facility consisting of land and building was acquired from King Corp. in exchange for 30,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $40 a share. Current assessed values of land and building for property tax purposes are $160,000 and $640,000, respectively.
On March 25, 2018, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $222,000. These expenditures had an estimated useful life of 12 years.
The leasehold improvements were completed on December 31, 2014, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2020, was renewable for an additional four-year term. On April 30, 2018, Cord exercised the renewal option.
On July 1, 2018, machinery and equipment were purchased at a total invoice cost of $330,000. Additional costs of $12,000 for delivery and $55,000 for installation were incurred.
On August 30, 2018, Cord purchased a new automobile for $13,000.
On September 30, 2018, a truck with a cost of $24,500 and a book value of $10,000 on date of sale was sold for $12,000. Depreciation for the nine months ended September 30, 2018, was $2,250.
On December 20, 2018, a machine with a cost of $19,500 and a book value of $3,100 at date of disposition was scrapped without cash recovery.
Required:
1.
Prepare a schedule analyzing the changes in each of the plant asset
accounts during 2018. Do not analyze changes in accumulated
depreciation and amortization.
2. For each asset category, prepare a schedule
showing depreciation or amortization expense for the year ended
December 31, 2018.
I need help with the second requirement.
In: Accounting
Waterways Corporation is a private corporation formed for the
purpose of providing the products and the services needed to
irrigate farms, parks, commercial projects, and private lawns. It
has a centrally located factory in a U.S. city that manufactures
the products it markets to retail outlets across the nation. It
also maintains a division that performs installation and warranty
servicing in six metropolitan areas.
The mission of Waterways is to manufacture quality parts that can
be used for effective irrigation projects that also conserve water.
By that effort, the company hopes to satisfy its customers, perform
rapid and responsible service, and serve the community and the
employees who represent them in each community.
The company has been growing rapidly, so management is considering
new ideas to help the company continue its growth and maintain the
high quality of its products.
Waterways was founded by Will Winkman who is the company president
and chief executive officer (CEO). Working with him from the
company’s inception is Will’s brother, Ben, whose sprinkler designs
and ideas about the installation of proper systems have been a
major basis of the company’s success. Ben is the vice president who
oversees all aspects of design and production in the company.
The factory itself is managed by Todd Senter who hires his line
managers to supervise the factory employees. The factory makes all
of the parts for the irrigation systems. The purchasing department
is managed by Helen Hines.
The installation and training division is overseen by vice
president Henry Writer, who supervises the managers of the six
local installation operations. Each of these local managers hires
his or her own local service people. These service employees are
trained by the home office under Henry Writer’s direction because
of the uniqueness of the company’s products.
There is a small human resources department under the direction of
Sally Fenton, a vice president who handles the employee paperwork,
though hiring is actually performed by the separate departments.
Teresa Totter is the vice president who heads the sales and
marketing area; she oversees 10 well-trained salespeople.
The accounting and finance division of the company is headed by Ann
Headman, who is the chief financial officer (CFO) and a company
vice president; she is a member of the Institute of Management
Accountants and holds a certificate in management accounting. She
has a small staff of accountants, including a controller and a
treasurer, and a staff of accounting input operators who maintain
the financial records.
A partial list of Waterways’ accounts and their balances for the
month of November follows.
| Accounts Receivable | $277,000 | |
| Advertising Expenses | 54,400 | |
| Cash | 262,000 | |
| Depreciation—Factory Equipment | 17,000 | |
| Depreciation—Office Equipment | 2,400 | |
| Direct Labor | 42,100 | |
| Factory Supplies Used | 16,900 | |
| Factory Utilities | 10,200 | |
| Finished Goods Inventory, November 30 | 69,100 | |
| Finished Goods Inventory, October 31 | 72,300 | |
| Indirect Labor | 47,700 | |
| Office Supplies Expense | 1,600 | |
| Other Administrative Expenses | 72,400 | |
| Prepaid Expenses | 41,300 | |
| Raw Materials Inventory, November 30 | 52,700 | |
| Raw Materials Inventory, October 31 | 37,900 | |
| Raw Materials Purchases | 185,300 | |
| Rent—Factory Equipment | 46,700 | |
| Repairs—Factory Equipment | 4,500 | |
| Salaries | 323,800 | |
| Sales Revenue | 1,350,600 | |
| Sales Commissions | 40,600 | |
| Work In Process Inventory October 31 | 52,800 | |
| Work In Process Inventory, November 30 | 42,300 |
A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule, an income statement, and a partial balance sheet for Waterways Corporation for the month of November. (List Current Assets in order of liquidity.)
In: Accounting