Accounting 3 page | Accounting homework help

  

Journal Entries (Cash Flow Hedge)

On December 1, 20X8, Denizen Corporation entered into a 120-day forward contract to purchase 200,000 Canadian dollars (C$). Denizen’s fiscal year ends on December 31. The forward contract was to hedge an anticipated purchase of electronic goods on January 30, 20X9. The purchase took place on January 30, with payment due on March 31, 20X9. The derivative is designated as a cash flow hedge. The company uses the forward exchange rate to measure hedge effectiveness. The direct exchange rates follow:

  

Spot Rate

Forward Rate for   March 1, 20X9

 

December 1, 20X8

0.940

0.944

 

December 31, 20X8

0.945

0.947

 

January 30, 20X9

0.942

0.943

 

March 31, 20X9

0.941

Required:

Prepare all journal entries for Denizen Corporation.

Requirements:

  • Write      a paper of 4 pages in length, not counting the title and reference pages,      which you must include.
  • Use      terms, evidence, and concepts from class readings, including professional      business language.
  • Cite      at least 5 credible, academic or professional sources for this assignment,      outside of the textbook. Format your paper according to APA format.

Chapter 11 in Advanced Financial Accounting (pp. 548-573)

Covers foreign currency transactions, including foreign currency import and export transactions, managing international currency risk with foreign currency forward exchange financial instruments, derivatives designated as hedges, and managing an exposed foreign currency net asset or liability position that is not a designated hedging instrument.

Covers Foreign Currency Transactions and Financial Instruments all the way through Case 1, Managing an Exposed Foreign Currency Net Asset or Liability Position.

Chapter 11 PowerPoint Lecture 

Deloitte Global Services Limited. (2018). Key differences between the US GAAP and IFRS. Retrieved from https://www.iasplus.com/en-us/standards/ifrs-usgaap

Focus on the following subjects: derivatives: definitions and scope; and hedge accounting.

Financial Accounting Standards Board. (2017). Derivatives and hedging (Topic 815). Retrieved from http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176169282347&acceptedDisclaimer=true.

Read pp. 1-8, which summarize the 405-page document issued by the FASB.

PwC. (2018). IFRS and US GAAP: Similarities and differences. Retrieved from https://www.pwc.com/us/en/cfodirect/assets/pdf/accounting-guides/pwc-ifrs-us-gaap-similarities-and-differences.pdf

Read the following in Chapter 11: Section 11.1 through 11-3.

Use CTRL F and hit the search terms “cash flow hedge” and “fair value hedge” to find each place both hedges are discussed in Chapter 11.

Bogicevic, J. (2013). Accounting implications of foreign currency transactions translation and hedging. Ekonomski Horizonti, 15(2), 137-151.

Rashty, J., & O’Shaughnessy, J. (2012). Foreign currency forward contracts and cash flow hedging. The CPA Journal, 82(3), 22-27.

Bank for International Settlements. (2016). Triennial Central Bank survey: Foreign exchange turnover in April 2016. Retrieved from https://www.bis.org/publ/rpfx16fx.pdf

Doupnik, T. S., & Perera, H. (2015). International accounting (4th ed.). New York, NY: McGraw-Hill Publication.

Microsoft. (2017). Microsoft 2017 annual report. Retrieved from https://www.microsoft.com/en-us/Investor/sec-filings.aspx?year=2017&filing=annual

World Trade Organization. (2017). World Trade Statistical Review 2017. Retrieved from https://www.wto.org/english/res_e/statis_e/wt

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more