How can business activity affect the government?

Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchas

gladu [14]

Answer:

a. The effect on reported income in 2020 is a foreign exchange gain of $6,400.

b-1. The effecton reported income in 2020 is a foreign exchange loss of -$12,800.

b-1. The effect on reported income in 2021 is a foreign exchange gain of $9,600.

c-1. The effect on reported income in 2020 is a foreign exchange loss of -$6,400.

c-1. The effect on reported income in 2021 is a foreign exchange gain of $9,600.

Explanation:

a. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020?

Since the U.S. Dollar per Brazilian Real on 1-Sep-20 is higher than the U.S. Dollar per Brazilian Real on 31-Dec-20, the effect of the exchange rate fluctuations on reported income in 2020 is a foreign exchange gain calculated as follows:

Foreign exchange gain on 31-Dec-20 = Value of surfboards in Brazilian real * (U.S. Dollar per Brazilian Real on 1-Sep-20 - U.S. Dollar per Brazilian Real on 31-Dec-20) = BRL640,000.00 * ($0.24 - $0.23) = $6,400

b. Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021?

b-1. Since the U.S. Dollar per Brazilian Real on 1-Dec-20 is lower than the U.S. Dollar per Brazilian Real on 31-Dec-20, the effect of the exchange rate fluctuations on reported income in 2020 is a foreign exchange loss calculated as follows:

Foreign exchange loss on 31-Dec-20 = Value of surfboards in Brazilian real * (U.S. Dollar per Brazilian Real on 1-De-20 - U.S. Dollar per Brazilian Real on 31-Dec-20) = BRL640,000.00 * ($0.23 - $0.25) = -$12,800

b-2. Since the U.S. Dollar per Brazilian Real on 31-Dec-20 is higher than the U.S. Dollar per Brazilian Real on 1-Mar-21, the effect of the exchange rate fluctuations on reported income in 2021 is a foreign exchange gain calculated as follows:

Foreign exchange gain on 31-Mar-21 = Value of surfboards in Brazilian real * (U.S. Dollar per Brazilian Real on 1-Dec-20 - U.S. Dollar per Brazilian Real on 1-Mar-21) = BRL640,000.00 * ($0.25 - $0.235) = $9,600

c. Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and in 2021?

c-1. Since the U.S. Dollar per Brazilian Real on 1-Sep-20 is lower than the U.S. Dollar per Brazilian Real on 31-Dec-20, the effect of the exchange rate fluctuations on reported income in 2020 is a foreign exchange loss calculated as follows:

Foreign exchange loss on 31-Dec-20 = Value of surfboards in Brazilian real * (U.S. Dollar per Brazilian Real on 1-Sep-20 - U.S. Dollar per Brazilian Real on 31-Dec-20) = BRL640,000.00 * ($0.24 - $0.25) = -$6,400

c-2. Since the U.S. Dollar per Brazilian Real on 31-Dec-20 is higher than the U.S. Dollar per Brazilian Real on 1-Mar-21, the effect of the exchange rate fluctuations on reported income in 2021 is a foreign exchange gain calculated as follows:

Foreign exchange gain on 31-Mar-21 = Value of surfboards in Brazilian real * (U.S. Dollar per Brazilian Real on 1-Dec-20 - U.S. Dollar per Brazilian Real on 1-Mar-21) = BRL640,000.00 * ($0.25 - $0.235) = $9,600

6 0

3 years ago

When might a generic message be appropriate to use? Question 20 options: (ANSWER ASAP PLS)

liubo4ka [24]

As a public service announcement at an airport

7 0

1 year ago

BEST ANSWER WILL GET BRAINLIST PLZ HELP MEE

monitta

Answer:

A few incentives are kids, family, food, a home, etc.

Explanation:

If you don't have enough money for your kids then you will barely be eating and will be struggling in debt, and your home wont be in top shape to live in.

7 0

3 years ago

The futures price of gold is $1,000. Futures contracts are for 100 ounces of gold, and the margin requirement is $3,000 a contra

Dmitry [639]

Answer:

a. The initial remittance is the same as the initial margin requirement of $3,000.

b. The profit is;

= 100 ounces * ( 1,005 - 1,000)

= $500

Return is;

= Profit/ Margin

= 500/3,000

= 16.67%

c. The loss is;

= 100 * ( 1,000 - 998)

= -$200

d. If the futures price declines to $984, what must the speculator do?

Depends on if the maintenance requirement is still below the balance.

= 3,000 - 100 * (1,000 - 984)

= $1,400

This is below the maintenance margin of $1,500 and so the speculator will have to deposit an amount that will take it back to the original margin requirement.

= 3,000 - 1,400

= $1,600

Speculator should deposit $1,600.

e. = 3,000 - 100 (1,000 - 982)

= $1,200

8 0

4 years ago

_____ is a very short range wireless connectivity technology that enables consumers to swipe their credit cards or even cell pho

Dmitrij [34]

I would say D, near field communications.

3 0

3 years ago