Valix Finacc vol 1 Problem 14-10

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 14-10

Requirement 1

   2008                                                                                                                                     

Dec. 31   Forward contract receivable                                             1,500,000

                      Unrealized gain – forward contract (5,000 x 300)                                1,500,000

                                                                                                                                   

   2009                                                                                                 

Jan.   1   Tree inventory (5,000 x 1,800)                                   9,000,000

                      Cash                                                                                                    9,000,000

           1   Cash                                                                                              1,500,000

                      Forward contract receivable                                                              1,500,000

           1   Unrealized gain – forward contract                                              1,500,000

                      Gain on forward contract                                                                  1,500,000

Requirement 2

   2008

Dec. 31   Unrealized loss – forward contract                                       500,000

                      Forward contract payable (5,000 x 100)                                                500,000

   2009

Jan.   1   Tree inventory (5,000 x 1,400)                                   7,000,000

                      Cash                                                                                                    7,000,000

          1   Forward contract payable                                                   500,000

                     Cash                                                                                                       500,000

                         

          1   Loss on forward contract                                                     500,000

                     Unrealized loss – forward contract                                                         500,000