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Lilit [14]
3 years ago
5

FutureForm, a U.S. company, imports microprocessors from Japan. The company must pay in yen to the Japanese supplier within 30 d

ays. In a particular exchange, the company must pay the Japanese supplier ¥150,000 for each microprocessor at the current dollar/yen spot exchange rate of $1 = ¥110. FutureForm intends to resell the microprocessors the day they arrive for $1,600 each but it does not have the funds to pay the Japanese supplier until these have been sold. What will happen if the exchange rate after 30 days is $1 = ¥90?
Business
1 answer:
Gnoma [55]3 years ago
7 0

Answer:

The price per microprocessor will increase to $1,666.67 from $1,363.64 which was the price when they received them.

Explanation:

At the day that FutureForm receives the microprocessors, it owes its Japanese supplier $1,363.64 per microprocessor. Since FutureForm didn't have the money to them immediately and had to wait one month to collect it, the amount owed per microprocessor increased to $1,666.67. This happened because the Japanese yen appreciated against the US dollar and now you need more US dollars to buy the same amount of Japanese yens.

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Answer:

Entries are given below

Explanation:

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                                                          DEBIT          CREDIT

Cash                                                 1,042,973

Bonds payable                                                     970,000

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December 31, 2021 ( interest expense)

                                                            DEBIT          CREDIT

Interest Expense                               62,578

(1,042,973 x 12% x 6/12)

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(970,000 x 13% x 6/12)

June 30, 2022 (interest expense)

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Interest Expense                               62,550

(1,042,973-472) x 12% x 6/12)

Premium on bonds payable               500    

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(970,000 x 13% x 6/12)

5 0
3 years ago
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Answer:

1.

Date                   Account Title                                             Debit          Credit

Dec. 31             Bad debt expense                                    $9,000

                        Allowance for doubtful accounts                                 $9,000

Working

= 3% * 300,000

= $9,000

2.

Date                   Account Title                                             Debit          Credit

Dec. 31             Bad debt expense                                    $12,000

                        Allowance for doubtful accounts                              $12,000

Working

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3.

Date                   Account Title                                             Debit          Credit

Dec. 31             Bad debt expense                                    $12,500

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<u></u>

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Explanation:

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The same would be relevant

6 0
3 years ago
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