REQUIREDPrepare the journal entries for the settlement of the contracts on April 1, 2021. What is the value of the forward contract? Question 3Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactionswere recorded:On December 1, 2020, Chrysler Exporters Inc., purchased merchandise from Chang's Ltd aI.Japanese manufacturer. The invoice was for ¥500,000, payable on April 1, 2021.On the same day, Chrysler Exporters Inc. accepted a forward exchange contract (forwardII.contract) to buy ¥500,000 on April 1, 2021.On April 1, 2021, the ¥500,000 was delivered on the contract and the supplier was settled.The spot rates and the forward rates were as follows:III.IV.DateSpot rateForward ratefor delivery (¥) on April 1, 2021December 1, 2020$0.0084$0.0089December 31, 20200.00830.0088April 1, 20210.0092

Question 3 Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactions were recorded: 1. On December 1, 2020, Chrysler Exporters Inc., purchased merchandise from Chang's Ltd a Japanese manufacturer. The invoice was for ¥500,000, payable on April 1, 2021. II. On the same day, Chrysler Exporters Inc. accepted a forward exchange contract (forward contract) to buy ¥500,000 on April 1, 2021. II. On April 1, 2021, the ¥500,000 was delivered on the contract and the supplier was settled. IV. The spot rates and the forward rates were as follows: Date Spot rate Forward rate for delivery (¥) on April 1, 2021 December 1, 2020 $0.0084 $0.0089 December 31, 2020 0.0083 0.0088 April 1, 2021 0.0092

Question 3 Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactions were recorded: 1. On December 1, 2020, Chrysler Exporters Inc., purchased merchandise from Chang's Ltd a Japanese manufacturer. The invoice was for ¥500,000, payable on April 1, 2021. II. On the same day, Chrysler Exporters Inc. accepted a forward exchange contract (forward contract) to buy ¥500,000 on April 1, 2021. II. On April 1, 2021, the ¥500,000 was delivered on the contract and the supplier was settled. IV. The spot rates and the forward rates were as follows: Date Spot rate Forward rate for delivery (¥) on April 1, 2021 December 1, 2020 $0.0084 $0.0089 December 31, 2020 0.0083 0.0088 April 1, 2021 0.0092

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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