Assignment 1 whole sheet of Paper

Reference: Accounting for Foreign Currency Transactions+

1. Iskubidu Company, a Philippine Corporation, bought inventory from a supplier in Japan on
November 2, 2009 for 50,000 yen, when the spot rate was P 0.4295. On December 31,
2010, the spot rate was P 0.4295. On January 15, 2011, Iskubidu bought 50,000 yen at a
spot rate of P 0.4250 and paid the invoice. How much should Iskubidu report in its income
statements for 2010 and 2011 as foreign exchange gain or (loss). Prepare all necessary
journal entries.
2. On October 1, 2010, Iskrapidu Cmpany, a Philippine Corporation acquired goods from USA
company for $ 10,000 payable in US Dollars on April 1, 2011. Spot rates on various dates
follow:
a. Transaction Date=
P 1= $0.018
b. Balance Sheet Date, 12/31/10= P 1= $ 0.017
c. Settlement Date=
P 1= $ 0.020
As a result of this transaction, Iskrapidu has a foreign exchange gain or (loss) in 2010 and
2011 of?
Prepare all necessary journal entries.
3. On July 1. 2010, Luzon Corporation borrowed 1, 680, 000 yen from a Japanese Lender
evidenced by an interest bearing note due on July 1, 2011. The Philippine Peso equivalent
of the note principal was as follows:
a. July 1, 2010
- Date Borrowed
P 210,000
b. December 31, 2010- Luzons Year end
240,000
c. July 1, 2011- Date repaid
280,000
In its income statement for 2011, what amount should Luzon include as a foreign
exchange gain or (loss)?
Prepare all necessary journal entries.