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Sunday, November 14, 2010

Valix Finacc vol 1 Problem 14-13

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 14-13


Requirement 1


   2008
Dec. 31   Futures contract receivable                                                 500,000
                        Unrealized gain – futures contract (50,000 x 10)                                  500,000

   2009 
Jan.   1   Purchases                                                                            8,000,000           
                    Cash (50,000 x 160)                                                                                8,000,000

          1   Cash                                                                                     500,000
                     Futures contract receivable                                                                   500,000            
          1   Unrealized gain – futures contract                                       500,000
                     Gain on futures contract                                                                                    500,000

Requirement  2

   2008
Dec. 31   Unrealized loss – futures contract                                         250,000
                      Futures contract payable (50,000 x 5)                                                    250,000

   2009
Jan.   1   Purchases                                                                            7,250,000
                      Cash (50,000 x 145)                                                                              7,250,000
                                                                             

          1   Futures contract payable                                                     250,000
                      Cash                                                                                                      250,000

          1   Loss on futures contract                                                       250,000
                      Unrealized loss - futures contract                                                           250,000

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