Part I Maple Company had the following export and import transactions during 20X5:

1. On March 1, Maple sold goods to a Canadian company for C$30,000, receivable on May 30. The spot rates for Canadian dollars were C$1 = $0.65 on March 1 and C$1 = $0.68 on May 30.
2. On July 1, Maple signed a contract to purchase equipment from a Japanese company for 500,000. The equipment was manufactured in Japan during August and was delivered to Maple on August 30 with payment due in 60 days on October 29. The spot rates for yen were 1 = $0.102 on July 1, 1 = $0.104 on August 30, and 1 = $0.106 on October 29. The 60-day forward exchange rate on August 30, 20X5, was 1 = $0.1055.
3. On November 16, Maple purchased inventory from a London company for 10,000, payable on January 15, 20X6. The spot rates for pounds were 1 = $1.65 on November 16, 1 = $1.63 on December 31, and 1 = $1.64 on January 15, 20X6. The forward rate on December 31, 20X5, for a January 15, 20X6, exchange was 1 = $1.645.

Part II (needs to be done) Assume that Maple used forward contracts to manage the foreign currency risks of all of its export and import transactions during 20X5.

1. On March 1, 20X5, Maple, anticipating a weaker Canadian dollar on the May 30, 20X5, settlement date, entered into a 90-day forward contract to sell C$30,000 at a forward exchange rate of C$1 = $0.64. The forward contract was not designated as a hedge.
2. On July 1, 20X5, Maple, anticipating a strengthening of the yen on the October 29, 20X5, settlement date, entered into a 120-day forward contract to purchase 500,000 at a forward exchange rate of 1 = $0.105. The forward contract was designated as a fair value hedge of a firm commitment.
3. On November 16, 20X5, Maple, anticipating a strengthening of the pound on the January 15, 20X6, settlement date, entered into a 60-day undesignated forward exchange contract to purchase 10,000 at a forward exchange rate of 1 = $1.67.

Required: Prepare journal entries to record Maples foreign currency activities during 20X5 and 20X6. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

a-1

No	Date	General Journal	Debit	Credit
1	Mar. 1, 20X5	Dollars receivable from exchange brokerselected answer correct	not attempted	not attempted
		Foreign currency payable to exchange broker (C$)selected answer correct	not attempted	not attempted
2	May. 30, 20X5	Foreign currency transaction lossselected answer correct	not attempted	not attempted
		Foreign currency payable to exchange broker (C$)selected answer correct	not attempted	not attempted
3	May. 30, 20X5	Foreign currency payable to exchange broker (C$)selected answer correct	not attempted	not attempted
		Foreign currency units (C$)selected answer correct	not attempted	not attempted
4	May. 30, 20X5	Cashselected answer correct	not attempted	not attempted
		Dollars receivable from exchange brokerselected answer correct	not attempted	not attempted

a-2

No	Date	General Journal	Debit	Credit
1	Jul. 1, 20X5	Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted
		Dollars payable to exchange brokerselected answer correct	not attempted	not attempted
2	Aug. 30, 20X5	Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted
		Foreign currency transaction gainselected answer correct	not attempted	not attempted
3	Aug. 30, 20X5	Foreign currency transaction lossselected answer correct	not attempted	not attempted
		Firm commitmentselected answer correct	not attempted	not attempted
4	Aug. 30, 20X5	Equipmentselected answer correct	not attempted	not attempted
		Firm commitmentselected answer correct	not attempted	not attempted
		Accounts payable ()selected answer correct	not attempted	not attempted
5	Oct. 29, 20X5	Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted
		Foreign currency transaction gainselected answer correct	not attempted	not attempted
6	Oct. 29, 20X5	Dollars payable to exchange brokerselected answer correct	not attempted	not attempted
		Cashselected answer correct	not attempted	not attempted
7	Oct. 29, 20X5	Foreign currency units ()selected answer correct	not attempted	not attempted
		Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted

a-3

No	Date	General Journal	Debit	Credit
1	Nov. 16, 20X5	Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted
		Dollars payable to exchange brokerselected answer correct	not attempted	not attempted
2	Dec. 31, 20X5	Foreign currency transaction lossselected answer correct	not attempted	not attempted
		Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted
3	Jan. 15, 20X6	Foreign currency transaction lossselected answer correct	not attempted	not attempted
		Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted
4	Jan. 15, 20X6	Dollars payable to exchange brokerselected answer correct	not attempted	not attempted
		Cashselected answer correct	not attempted	not attempted
5	Jan. 15, 20X6	Foreign currency units ()selected answer correct	not attempted	not attempted
		Foreign currency receivable from exchange broker ()selected answer correct	not attempted	not attempted

b. What amount of foreign currency transaction gain or loss would Maple report on its income statement for 20X5 if Parts I and II of this problem were combined?

	Foreign currency transaction net lossselected answer correct of not attempted

c. What amount of foreign currency transaction gain or loss would Maple report on its income statement for 20X6 if Parts I and II of this problem were combined?

	Foreign currency transaction net lossselected answer correct of not attempted