On November 1,2023, Cheng Company (a U.S.-based company) forecasts the purchase of goods from a...
60.1K
Verified Solution
Link Copied!
Question
Accounting
On November Cheng Company a USbased company forecasts the purchase of goods from a foreign supplier for yuan. Cheng expects to receive the goods on April and make immediate payment. On November Cheng enters into a sixmonth forward contract to buy yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded in assessing hedge effectiveness and are amortized to net income using a straightline method on a monthly basis over the life of the contract. The following US dollarYuan exchange rates apply: Date Spot Rate Forward Rate to April November $ $ December April NA As expected, Cheng receives goods from the foreign supplier on April and pays yuan immediately. Cheng sells the imported goods in the local market in May Required: Prepare all journal entries, including December adjusting entries, to record the foreign currency forward contract and import purchase. What is the impact on net income in What is the impact on net income in
On November Cheng Company a USbased company forecasts the purchase of goods from a foreign supplier for yuan. Cheng expects to receive the goods on April and make immediate payment. On November Cheng enters into a sixmonth forward contract to buy yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded in assessing hedge effectiveness and are amortized to net income using a straightline method on a monthly basis over the life of the contract. The following US dollarYuan exchange rates apply:
Date Spot Rate Forward Rate to April
November $ $
December
April NA
As expected, Cheng receives goods from the foreign supplier on April and pays yuan immediately. Cheng sells the imported goods in the local market in May
Required:
Prepare all journal entries, including December adjusting entries, to record the foreign currency forward contract and import purchase.
What is the impact on net income in
What is the impact on net income in
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.