31) On March 1, 20X2, McBride Ltd. issued a purchase order to Tao Heavy Machines (Singapore) Inc. to acquire a drilling machine for $400,000 SGD. On the same day, McBride entered into a forward contract to receive $400,000 SGD on July 31, 20X2. The machine was delivered on June 1, 20X2 and payment was made July 31, 20X2. McBride has an April 30 year-end. The following information has been provided: Date Spot Rate Forward rate to July 31, 20X2 March 1, 20X2 .7686 .7810 April 30, 20X2 .7702 .7818 June 1, 20X2 .7940 .7985 July 31, 20X2 .7995 n/a Assume […]

  1) On December 31, 20X2, Bates Ltd. purchased 75% of the outstanding common shares of Ted Ltd. for $1,050,000 in cash. The balance sheets of Bates and Ted immediately before the acquisition were as follows (in 000s): Bates Ted Book Value Fair Value Book Value Fair Value Cash $160 $160 $100 $100 Accounts receivable 420 400 280 280 Inventory 600 680 300 350 Capital assets 1,820 2,000 1,320 1,620 $3000 $2,000 Current liabilities $280 $280 $160 1$80 Long-term liabilities 1,100 1,100 900 900 Common shares 500 500 Retained earnings 1,120 440 $3,000 $2,000 At the time of acquisition, Ted's […]

11) Roslynn Ltd. is a subsidiary of Goodale Co. Roslynn sold a machine to Goodale for a $50,000 gain. Goodale has now sold the machine to an unrelated party for a $20,000 gain. At the time of the sale, $35,000 of the profit on the sale from Roslynn was still unrealized. For consolidation purposes, what is the amount of gain that must be recognized on the sale of the machine? A) $15,000 B) $20,000 C) $30,000 D) $55,000 12) Grayson Ltd. acquired 60% of the outstanding common shares of Goldberg Ltd. for $480,000. At the date of acquisition, Goldberg's shareholders' […]

21) On June 1, 20X4, Chua (Canada) Co. entered into a 90-day forward contract to sell $500,000 Singapore dollars (SGD) to its bank on August 29,20X4. The following information has been provided: June 1, 90-day forward rate SGD$1 = $0.7750 July 1, 60-day forward rate SGD$1 = $0.7630 August 29, spot rate SGD$1 = $0.748 Chua has a June 30 year-end. What is the exchange gain (loss) at June 30, 20X4? A) $(6,000) B) $0 C) $1,500 D) $6,000 22) On June 1, 20X4, Chua (Canada) Co. entered into a 90-day forward contract to sell $500,000 Singapore dollars (SGD) to […]

11) What exchange rate is usually used to report non-monetary assets on the statement of financial position? A) Historical rate B) Spot rate C) Closing rate D) Fair value 12) What is a currency swap an example of? A) A futures contract B) A call option C) A derivative instrument D) A forward contract 13) Which of the following list would not be effective as a hedge for a Canadian company with a large number of transactions in Japan? A) Japanese yen held by a Canadian bank. B) Canadian funds held by a Japanese bank. C) A forward contract for […]