On November 1, 2014, PH firm ordered 1,000 units of inventory from a US firm for $20,000.

The inventory was shipped an

Philippine firm on December 1, 2014, to be paid on March 1, 2015. The firm's fiscal year-end is December 31. The spot rate
various times are as follows:

Buying Spot Rates Selling Spot Rates (at the persepective of the bank)
November 1, 2014 P39.80 P40.25
December 1, 2014 40.00 40.55 0.55
December 31, 2014 40.70 40.80
March 1, 2015 40.60 40.65 JDTorreda:
Settlement d
Prepare the journal entries of PH firm to record the transactions up to settlement date. Reporting da
forex g/l of 2

12/1/2014 Purchases 811,000

Accounts payable 811,000

12/31/2014 Foreign currency transaction loss 5,000

Accounts payable 5,000

3/1/2015 Accounts payable 816,000

Cash 813,000
Foreign currency transaction gain 3,000
20,000. The inventory was shipped and invoiced to the
year-end is December 31. The spot rates for US dollars at

JDTorreda:
(at the persepective of the bank) Invoice date rate -
reporting date rate =
forex g/l 2014
Spread

JDTorreda:
Settlement date rate -
Reporting date rate =
forex g/l of 2015

Exposed liability
Liab balance
12/31/2014 816,000
12/1/2014 811,000
Increase in liab 5,000

Alternative:
3,000
On November 1, 2014, a Philippine firm received an order for 100 units of inventory for $50,000 to a US firm. The Philippine fir
inventory and billed the US firm on December 1, 2014. The Philippine firm received the customer's remittance in full on March
firm's fiscal year-end is December 31. The spot rates for US dollars at various times are as follows:

Buying Spot Rates Selling Spot Rates

November 1, 2014 P39.80 P40.25
December 1, 2014 40.00 40.55
December 31, 2014 40.70 40.80
March 1, 2015 40.60 40.65

Prepare the journal entries to record the transactions up to settlement date.

12/1/2014 Accounts receivable 2,000,000 Exposed asset

Sales 2,000,000

12/31/2014 Accounts receivable 35,000 12/31/2014

Foreign currency transaction gain 35,000 12/1/2014
Increase in AR
3/1/2015 Cash 2,030,000 Alternative:
Foreign currency transaction loss 5,000 - 5,000
Accounts receivable 2,035,000
to a US firm. The Philippine firm shipped the
er's remittance in full on March 1, 2015. The
ws:

AR Balance
2,035,000
2,000,000
35,000
On November 1, 2014, a Philippine firm received an order for 100 units of inventory for $50,000 to a US firm. The
Philippine firm shipped the inventory and billed the US firm on December 1, 2014. The Philippine firm received the
customer's remittance in full on March 1, 2015. The firm's fiscal year-end is December 31. The spot rates for US dollars
at various times are as follows:

Buying Spot Rates Selling Spot Rates

November 1, 2014 P39.80 P40.25
December 1, 2014 40.00 40.55
December 31, 2014 40.70 40.80
March 1, 2015 40.60 40.65
March 31, 2015 40.85 40.90

Prepare the journal entries to record the transactions up to settlement date.

Assuming 50% was paid in March 1 and 50% was paid in March 31

12/1/2014 Accounts receivable 2,000,000 Exposed asset

Sales 2,000,000

12/31/2014 Accounts receivable 35,000 12/31/2014

Foreign currency transaction gain 35,000 12/1/2014
Increase in AR
3/1/2015 Cash 1,015,000 Alternative:
Foreign currency transaction loss 2,500 - 2,500
Accounts receivable 1,017,500

3/31/2015 Cash 1,021,250 Alternative:

Foreign currency transaction gain 3,750 3,750
Accounts receivable 1,017,500
to a US firm. The
e firm received the
pot rates for US dollars

AR Balance
2,035,000
2,000,000
35,000
John Corporation, whose functional currency is Peso, entered into the following transactions during 2014 and 2015:

On November 1, 2014, John purchased 1,000 shares of Pineapple Computers, Inc. (a listed company in the US) at a price of
$80 per share. John classified the investment as equity securities - FVTPL. The PHP-USD exchange rates on November 1,
2014 and December 31, 2014 were P40 and P40.50 respectively. The price of Pineapple Computers, Inc. shares on
December 31, 2014 was $100.

On December 10, 2014, John purchased equipment from a German company invoiced at 10,000 euros to be settled on
February 28, 2015. The PHP-EUR exchange rates on December 10, 2014, December 31, 2014, and February 28, 2015 were
P53.00, P53.20, and P53.80, respectively.

John Corporation's financial year ends on December 31.

Prepare the journal entries to record the transactions up to settlement date.

11/1/2014 Investment in equity securities FVTPL 3,200,000

Cash 3,200,000

12/10/2014 Equipment 530,000

Accounts payable 530,000

12/31/2014 Investment in equity securities FVTPL 850,000

Unrealized gain in FVTPL 850,000

Foreign currency transaction loss 2,000

Accounts payable 2,000

2/28/2015 Accounts payable 532,000

Foreign currency transaction loss 6,000
Cash 538,000
nsactions during 2014 and 2015:

a listed company in the US) at a price of

USD exchange rates on November 1,
pple Computers, Inc. shares on

ed at 10,000 euros to be settled on

31, 2014, and February 28, 2015 were

Exposed asset

Exposed liability
FVTPL Balance FV Gain/Loss (gain/loss depends on the nature o
12/31/2014 4,050,000 FV, year-end
11/1/2014 3,200,000 FV, recognition
Increase in FVTPL 850,000 FV Gain 810 FV gain(loss)
Forex Gain 40
Forex Gain/Loss (gain/loss depends on the natur
AP Balance Closing rate
12/31/2014 532,000 Recognition date spot rate
12/10/2014 530,000 Forex gain(loss)
Increase in AP 2,000
Alternative:
6,000
n/loss depends on the nature of the account):
xx @ closing rate
(xx) @ closing rate
xx

gain/loss depends on the nature of the account):

xx @ FV, recognition
(xx) @ FV, recognition
xx
John Corporation, whose functional currency is Peso, entered into the following transactions during 2014 and 2015:

On November 1, 2014, John purchased 1,000 shares of Pineapple Computers, Inc. (a listed company in the US) at a price of
$80 per share. John classified the investment as equity securities - FVTPL. The PHP-USD exchange rates on November 1,
2014 and December 31, 2014 were P40 and P39 respectively. The price of Pineapple Computers, Inc. shares on December
31, 2014 was $100.

On December 10, 2014, John purchased equipment from a German company invoiced at 10,000 euros to be settled on
February 28, 2015. The PHP-EUR exchange rates on December 10, 2014, December 31, 2014, and February 28, 2015 were
P53.00, P53.20, and P53.80, respectively.

John Corporation's financial year ends on December 31.

Prepare the journal entries to record the transactions up to settlement date.

11/1/2014 Investment in equity securities FVTPL 3,200,000

Cash 3,200,000

12/10/2014 Equipment 530,000

Accounts payable 530,000

12/31/2014 Investment in equity securities FVTPL 700,000

Unrealized gain in FVTPL 700,000

Foreign currency transaction loss 2,000

Accounts payable 2,000

2/28/2015 Accounts payable 532,000

Foreign currency transaction loss 6,000
Cash 538,000
nsactions during 2014 and 2015:

a listed company in the US) at a price of

USD exchange rates on November 1,
e Computers, Inc. shares on December

ed at 10,000 euros to be settled on

31, 2014, and February 28, 2015 were

Exposed asset

Exposed liability
FVTPL Balance FV Gain/Loss (gain/loss depends on the nature o
12/31/2014 3,900,000 FV, year-end
11/1/2014 3,200,000 FV, recognition
Increase in FVTPL 700,000 FV Gain 780 FV gain(loss)
Forex Loss - 80
Forex Gain/Loss (gain/loss depends on the natur
AP Balance Closing rate
12/31/2014 532,000 Recognition date spot rate
12/10/2014 530,000 Forex gain(loss)
Increase in AP 2,000
Alternative:
6,000
n/loss depends on the nature of the account):
xx @ closing rate
(xx) @ closing rate
xx

gain/loss depends on the nature of the account):

xx @ FV, recognition
(xx) @ FV, recognition
xx
On January 1, 2014, P Company, a Philippine based company, acquired for US$2,000,000 an 80% interest in S Company, w
P Company's functional and presentation currency is the Philippine Peso (PHP). S Company's financial statements are prep
US Dollars (USD).

The PHP spot exchange rates for the US Dollars for the 2014 fiscal year are as follows:
January 1, 2014 40.00
September 1, 2014 40.10
December 31, 2014 40.25
Average for the fourth quarter 40.22
Average for the year 40.20

S Company
Statement of Financial Position
As of December 31, 2014
(Amounts in US Dollars)

Assets Forex Rate Translated Amount for Conso

Cash 930,000 40.25 37,432,500
Accounts receivable (net) 608,000 40.25 24,472,000
Inventory (FIFO method) 830,000 40.25 33,407,500
Land 500,000 40.25 20,125,000
Buildings (net) 650,000 40.25 26,162,500
Equipment (net) 430,000 40.25 17,307,500
Total Assets 3,948,000 158,907,000

Liabilities and Equity

Accounts payable 640,000 40.25 25,760,000
Short-term notes payable 635,000 40.25 25,558,750
Bonds payable 900,000 40.25 36,225,000
Common stock 960,000 40.00 38,400,000
Paid-in capital in excess of par 300,000 40.00 12,000,000
Retained earnings 513,000 Rolled amount 20,556,600 Assuming 2015 squee
Foreign currency translation gain - OCI Balancing 406,650
Total Liabilities and Equity 3,948,000 158,907,000 SFP
SCI
S Company SCE
Statement of Income and Retained Earnings
For the year ended December 31, 2014
(Amounts in US Dollars)
Forex Rate Translated Amount for Conso
Sales 3,020,000 40.20 121,404,000
Cost of goods sold (Note 17) - 1,850,000 40.20 - 74,370,000
Gross profit 1,170,000 47,034,000
Depreciation expense - 100,000 40.20 - 4,020,000
Other expenses - 655,000 40.20 - 26,331,000
Income before tax 415,000 16,683,000
Income tax - 82,000 40.20 - 3,296,400
Net income 333,000 13,386,600
Retained earnings, beginning 480,000 40.00 19,200,000
Net income 333,000 13,386,600
Dividends declared, 9/1/2014 - 300,000 40.10 - 12,030,000
Retained earnings, ending 513,000 20,556,600

Note 17: Cost of Goods Sold

Inventory, beginning 760,000
Purchases 1,920,000
Total goods available for sale 2,680,000
Inventory, ending 830,000
Cost of goods sold 1,850,000

Prepare the translated financial statements of S Company from its functional currency to the presentation currency of the
purposes.
terest in S Company, which maintains its books in US$.
ial statements are prepared in the local currency unit

January 1, 2014 40.00

September 1, 2014 40.10
December 31, 2014 40.25
Average for the fourth quarter 40.22
Average for the year 40.20

Assuming 2015 squeezed figure gain is P500,000

OCI to be presented: SCE
500,000 Beg 406,650
93,350 Trans for the yr 93,350
---> end 500,000
recon to sfp 500,000
-

January 1, 2014 40.00

September 1, 2014 40.10
December 31, 2014 40.25
Average for the fourth quarter 40.22
Average for the year 40.20
ntation currency of the Parent for consolidation
Peter Corporation, a Philippine based company wholly owns Sardines Company in Hong Kong. The
trial balance of the latter as of December 31, 2017 in Hong Kong Dollar is as follows:
In HK$ Debits Credits
Cash 90,000
Accounts receivable 18,000
Land and building, net 45,000
Accounts payable 18,000
Bonds payable, 10% 45,000
Capital stock 50,000
Retained earnings, January 1 30,000
Sales 75,000
Cost of sales and expenses 65,000
218,000 218,000

In addition, the following information is available:

1. Transactions involving land and buildings, bonds payable, and capital stock all occurred in 2013.
2. Income statement accounts are assumed to have occurred evenly.
3. The general price index were as follows:
2013 100
January 1, 2017 150
Average price index for 2017 400
December 31, 2017 525 CPI

4. The relevant exchange rates of PHP for every HK$1 were as follows:
2013 15.00
January 1, 2017 21.00
January 31, 2017 22.00
March 15, 2017 26.00
October 15, 2017 28.00
Average for 2013-2017 28.50
Average for 2017 27.00
December 31, 2017 29.00

5. The peso balance of retained earnings on December 31, 2016 was P5,000,000.
6. The functional currency is the currency of a hyperinflationary economy.
4. The relevant exchange rates of PHP for every
2013
January 1, 2017
3. The general price index were as follows: January 31, 2017
2013 100 March 15, 2017
January 1, 2017 150 October 15, 2017
Average price index for 2017 400 Average for 2013-2017
December 31, 2017 525 CPI Average for 2017
December 31, 2017

Income Statement Book Value (HK$) Factor Restated FS (HK$)

Sales 75,000.00 525/400 98,437.50
Cost of sales and expenses - 65,000.00 525/400 - 85,312.50
Purchasing power loss - Balancing - 24,375.00
Net income 10,000.00 Note A - 11,250.00

Balance Sheet
Assets
Cash 90,000.00 Monetary 90,000.00
Accounts receivable 18,000.00 Monetary 18,000.00
Land and building, net 45,000.00 525/100 236,250.00
Total Assets 153,000.00 344,250.00

Liabilities and Equity

Accounts payable 18,000.00 Monetary 18,000.00
Bonds payable, 10% 45,000.00 Monetary 45,000.00
Capital stock 50,000.00 525/100 262,500.00
Retained earnings 40,000.00 Balancing 18,750.00
Foreign currency translation loss - OCI - -
Total Liabilities and Equity 153,000.00 344,250.00

Note A: Purchasing Power G/L

RE, beginning 30,000.00
Net income - 11,250.00 Squeezed Includes PPGL
Dividends -
RE, ending 18,750.00
exchange rates of PHP for every HK$1 were as follows:
15.00
21.00
22.00
26.00
28.00
28.50
27.00
29.00

Forex Rate Translated AmounParent books Elim entries Conso balance

27.00 2,657,812.50
27.00 - 2,303,437.50
27.00 - 658,125.00
- 303,750.00

29.00 2,610,000.00
29.00 522,000.00
29.00 6,851,250.00
9,983,250.00

29.00 522,000.00
29.00 1,305,000.00
15.00 3,937,500.00
Rolled amount 4,696,250.00
Balancing - 477,500.00 CUMULATIVE!
9,983,250.00

For Forex Translation:

RE, beginning 5,000,000.00
Net income - 303,750.00
Dividends -
RE, ending 4,696,250.00