江西財經(jīng)大學高級財務會計國際學院試題庫

1、-. z.Advanced Accounting, 11e (Beams/Anthony/Bettinghaus/Smith)Chapter 13 Accounting for Derivatives and Hedging ActivitiesMultiple Choice Questions1) Which of the following hedging strategies would a business most likely useA) An importer will want to hedge his foreign denominated accounts receivab

2、le and will purchase forward contracts to hedge an e*posed net asset position.B) An importer will want to hedge his foreign denominated accounts payable and will purchase forward contracts to hedge an e*posed net liability position.C) An e*porter will want to hedge his foreign denominated accounts r

3、eceivable and will purchase forward contracts to hedge an e*posed net liability position.D) An e*porter will want to hedge his foreign denominated accounts payable and will purchase forward contracts to hedge an e*posed net liability position.Answer: BObjective: LO2Difficulty: Easy2) A highly-effect

4、ive hedge of an e*isting asset or liability that is reported on the balance sheet would be recorded usingA) Modified Cash Basis Accounting.B) Critical Term Hedge Analysis.C) Fair Value Hedge Accounting.D) Hedge of Net Investment in Foreign Subsidiary.Answer: CObjective: LO2Difficulty: Easy3) Which o

5、f the following is not an approach appropriate for hedge accountingA) Cash Flow Hedge AccountingB) Critical Term Hedge AccountingC) Fair Value Hedge AccountingD) Hedge of Net Investment in Foreign SubsidiaryAnswer: BObjective: LO1, 2Difficulty: Easy4) If a financial instrument is classified as a cas

6、h flow hedge, thenA) its gains or losses are reported in the ine statement if a fiscal year-end occurs before the settlement date.B) it is classified as a held-to-maturity asset.C) it does not require a notional amount.D) its gains or losses are reported in the balance sheet if a fiscal year-end occ

7、urs before the settlement date.Answer: DObjective: LO1Difficulty: Easy5) When a cash flow hedge is appropriate, the effective portion of the gain or loss on the derivative isA) deferred using other prehensive ine.B) recognized immediately at the time the agreement is made.C) recognized over time, am

8、ortized over the period of the agreement.D) recognized over time, offset by the fluctuation in the value of the hedged asset or liability.Answer: AObjective: LO1Difficulty: Easy6) Barnes pany entered into a forward contract during the current year to hedge the risk of a material supply cost increase

9、. Based on the current market, at year-end the present value of the estimated amount they will have to pay in ten months is $750,000. What entry would be recorded at year-end closing, assuming that no amount was recorded for this contract until this timeA) Forward Contract (+A)$750,000Other prehensi

10、ve Ine (+SE)$750,000B) Forward Contract (+A)$750,000Earnings (+SE)$750,000C) Other prehensive Ine (-SE)$750,000Earnings (+SE)$750,000D) Other prehensive Ine (-SE)$750,000Forward Contract (+L)$750,000Answer: DObjective: LO3Difficulty: Moderate7) A forward contract used as a cash flow hedge will be re

11、corded as an asset ifA) the holder is e*pecting to receive a payment as a result of the contract.B) the holder is accounting for the hedged instrument as a fair value hedge.C) the holder is hedging the net investment in a foreign entity.D) the holder is using the alternate accounting method and defe

12、rring all gains or losses from the hedge.Answer: AObjective: LO1Difficulty: Easy8) A fair value hedge differs from a cash flow hedge because a fair value hedgeA) cannot be used for firm purchase or sales mitments.B) is not recorded unless it is a highly-effective hedge.C) records gains or losses in

13、the value of the derivative directly to earnings of the pany.D) defers the gains or losses in the value of the derivative using Other prehensive Ine.Answer: CObjective: LO3Difficulty: Easy9) The purchase price of an option contract is typically recorded asA) an e*pense.B) an asset.C) an amortized co

14、st.D) a ponent of shareholders equity.Answer: BObjective: LO3Difficulty: Easy10) Taydus Corporation, a U.S. corporation, sold goods on December 2 to a pany overseas, and is now carrying a receivable denominated in euros. Taydus signed a 60-day forward contract on that same date to sell euros. The sp

15、ot rate was $1.40 on the date they signed the contract and the 60-day forward rate was $1.36. At the end of that month when they closed the books at their fiscal year-end, the spot rate was $1.42 and the 30-day forward rate was $1.40. Assume this is a fair value hedge. The forward contract will not

16、be settled net. What would be reported by Taydus for the year ending December 31A) Net e*change gainB) Net e*change lossC) Deferred e*change gainD) Deferred e*change lossAnswer: BE*planation: B) The spot rate increased $.02, resulting in a gain on the receivable.The forward rate increased $.04, resu

17、lting in a larger loss on the forward, thus they e*perienced a net e*change loss.Objective: LO4Difficulty: Moderate11) Cirtus Corporation, a U.S. corporation, placed an order for inventory from a Me*ican supplier on September 18 when the spot rate was $0.0840 = 1 peso. The invoice price will be deno

18、minated in pesos. At that time, they entered into a 30-day forward contract (designated as a fair value hedge of the firm mitment to purchase) to purchase 860,000 pesos at a forward rate of $0.0810. On October 18 when the inventory was received, the spot rate was $0.0890. At what amount should the i

19、nventory be carried on Cirtus booksA) $69,660B) $72,240C) $76,540D) $860,000Answer: AE*planation: A) Inventory = 860,000 .081 = $69,660Objective: LO4Difficulty: Moderate12) When preparing their year-end financial statements, the Warner pany includes a footnote regarding their hedging activities duri

20、ng the year. Which of the following is not required to be disclosedA) How hedge effectiveness is determined and assessedB) The specific types of risks being hedged, and how they are being hedgedC) Alternative hedging options declinedD) The net gain or loss reported for the period for fair value hedg

21、es and where in the financial statements it is reportedAnswer: CObjective: LO5Difficulty: Moderate13) International accounting standards differ from U.S. Generally Accepted Accounting Principles in that International standardsA) require that firm sale or purchase mitments are accounted for as fair v

22、alue hedges.B) require that firm sale or purchase mitments are accounted for as cash flow hedges.C) state that firm sale or purchase mitments may not be treated as a hedged transaction.D) permit firm sale or purchase mitments to be accounted for as either fair value hedges or cash flow hedges.Answer

23、: DObjective: LO6Difficulty: Moderate14) On May 1, 2011, Listing Corporation receives inventory items from their Bulgarian supplier. At the same time, Listing signed a forward contract to purchase 75,000 Bulgarian lev in si*ty days to hedge the inventory purchase at $0.738, the 60-day forward rate.

24、Payment for the inventory will be due in si*ty days in Bulgarian lev. Assume the forward contract will be settled net and this qualifies as a fair value hedge. The related e*change rates are shown below:DateSpot RateForward Rateto June 30May 1, 2011$0.7270$0.7380May 31, 2011$0.7350$0.7400June 30, 20

25、11$0.7420$0.7420Assuming a present value factor of 1 for simplicity, what is the fair value of this forward contract on May 31A) $150 assetB) $150 liabilityC) $375 assetD) $375 liabilityAnswer: AE*planation: A) Current forward rate: 75,000 lev $0.7400$55,500Contracted forward rate: 75,000 lev $0.738

26、055,350Net change in value150With PV = 1, Net change = asset valueObjective: LO4Difficulty: ModerateUse the following information to answer the question(s) below.On November 2, 2011, Bellamy Corporation sells product to their Danish customer. At the same time, Bellamy signed a forward contract to se

27、ll 200,000 Danish krone in ninety days to hedge the account receivable at$0.1905, the 90-day forward rate. The receivable is e*pected to be collected in ninety days. Assume the forward contract will be settled net and this is a fair value hedge. The related e*change rates are shown below:DateSpot Ra

28、teForward Rateto January 31November 2, 2011$0.1910$0.1905December 31, 2011$0.1920$0.1912January 31, 2012$0.1915$0.191515) Assuming a present value factor of 1 for simplicity, what is the fair value of this forward contract on November 2A) $-0-B) $100 assetC) $100 liabilityD) $38,100 assetAnswer: AOb

29、jective: LO4Difficulty: Moderate16) Assuming a present value factor of 1 for simplicity, what is the fair value of this forward contract on December 31A) $160 assetB) $160 liabilityC) $140 assetD) $140 liabilityAnswer: DObjective: LO4Difficulty: Moderate17) Assuming a present value factor of 1 for s

30、implicity, what is the fair value of this forward contract on January 31A) $-0-B) $ 60 assetC) $160 liabilityD) $200 liabilityAnswer: DObjective: LO4Difficulty: ModerateUse the following information to answer the question(s) below.On December 1, 2011, Thomas pany, a U.S. corporation, purchases inven

31、tory from a vendor in Italy for 400,000 euros. Payment is due in 90 days. To hedge the transaction, Thomas signs a forward contract to buy 400,000 euros in 90 days at $1.3670. Thomas uses a discount rate of 6% (present value factor for 30 days = .9950; 60 days = .9901; 90 days = .9851). Assume the f

32、orward contract will be settled net and this is a cash flow hedge. Currency e*change rates are shown below:DateSpot RateForward Rateto February 29December 1, 2011$1.3694$1.3670December 31, 2011$1.3642$1.3660January 30, 2012$1.3670$1.3690February 29, 2012$1.3712$1.371218) What is the fair value of th

33、e forward contract at December 31, 2011A) $400.00 liabilityB) $400.00 assetC) $396.04 liabilityD) $396.04 assetAnswer: CE*planation: C) Current forward rate: 400,000 euros $1.3660$546,400Contracted forward rate: 400,000 euros $1.3670546,800Net change in value(400)PV for 60 days 6%.9901Fair value of

34、forward contract on 12/31/11$ (396.04)Objective: LO4Difficulty: Moderate19) What is the fair value of the forward contract at January 30A) $796 liabilityB) $796 assetC) $800 liabilityD) $800 assetAnswer: BE*planation: B) Current forward rate: 400,000 euros $1.369$547,600Contracted forward rate: 400,

35、000 euros $1.367546,800Net change in value800PV for 30 days 6%.9950Fair value of forward contract on 1/30/12$ 796Objective: LO4Difficulty: Moderate20) What is the fair value of the forward contract at February 29A) $-0-B) $1,654.97 assetC) $1,654.97 liabilityD) $1,680 assetAnswer: DE*planation: D) C

36、urrent forward rate: 400,000 euros $1.3712$548,480Contracted forward rate: 400,000 euros $1.367546,800Net change in value1,680PV for 0 days 6% 1.0Fair value of forward contract on 2/29/12$1,680Objective: LO4Difficulty: ModerateE*ercises1) On November 1, 2011, Portsmith Corporation, a calendar-year U

37、.S. corporation, invested in a purely speculative contract to purchase 1 million yen on January 30, 2012, from the Karoke Trading pany, a Japanese brokerage firm. Portsmith agreed to purchase 1,000,000 yen from Karoke at a fi*ed price of $0.0100 per yen. Karoke agreed to transmit 1,000,000 yen to Po

38、rtsmith on January 30. Net settlement is not permitted. The spot rates for yen are:Nov 01, 2011 1 yen = $0.0097Dec 31, 2011 1 yen = $0.0104Jan 30, 2012 1 yen = $0.0106The 30-day forward rate for yen on December 31, 2011 was $0.0104.Required:Prepare the General Journal entries that Portsmith would re

39、cord on November 1, December 31, and January 30.Answer: Portsmiths General Journal11/01/11Contract Receivable (yen)10,000Contract Payable10,000(1,000,000 $0.0100)12/31/11Contract Receivable (yen)400E*change Gain4001,000,000 ($0.0104 - $0.0100)01/30/12Contract Receivable (yen)200E*change Gain2001,000

40、,000 ($0.0106 - $0.0104)Cash (yen)10,600Contract Payable10,000Cash10,000Contract Receivable (yen)10,600Objective: LO4Difficulty: Moderate2) On November 1, 2011, Ross Corporation, a calendar-year U.S. corporation, invested in a purely speculative contract to purchase 1 million euros on January 30, 20

41、12, from Trattoria pany, an Italian brokerage firm. Ross agreed to purchase 1,000,000 euros from Trattoria at a fi*ed price of $1.420 per euro. Trattoria agreed to transmit 1,000,000 euros to Ross on January 30, 2012. Net settlement is not permitted. The spot rates for euros are:Nov 01, 2011 1 euro

42、= $1.415Dec 31, 2011 1 euro = $1.395Jan 30, 2012 1 euro = $1.410The 30-day futures rate for euros on December 31, 2011 was $1.405.Required:Prepare the General Journal entries that Ross would record on November 1, December 31, and January 30.Answer: Rosss General Journal11/01/11Contract Receivable (e

43、uro)1,420,000Contract Payable1,420,000(1,000,000 $1.420/euro)12/31/11E*change Loss15,000Contract Receivable (euro)15,0001,000,000 ($1.405 - $1.420)01/30/12Contract Receivable (euro)5,000E*change Gain5,0001,000,000 ($1.410 - $1.405)Cash (euro)1,410,000Contract Payable1,420,000Cash1,420,000Contract Re

44、ceivable (euro)1,410,000Objective: LO4Difficulty: Moderate3) On June 1, 2011, Dapple Industries purchases an option contract for $5,000 on 10,000 gallons of aviation gas to minimize its purchasing cost price e*posure. At the time, the market price is $2.50 per gallon and the option price of $2 per g

45、allon will e*pire 6 months later. Dapple can e*ercise the option at its discretion. When Dapple prepares quarterly reports on June 30, Dapple is still holding the option. On June 30, the market price of aviation gas is $4.50 per gallon. The option is to be settled net.On August 1, Dapple e*ercises t

46、he option when the gas market price is $5.00 per gallon and purchases 40,000 gallons of gas. On August 15, Dapple uses all of the gas on a charter flight.Required:What are Dapples journal entries with regard to the aviation gas option Assume this is a cash flow hedge. Ignore the time value of money.

47、Answer: Dapples General Journal6/01/11Aviation gas contract option5,000Cash5,0006/30/11Aviation gas contract option20,000Other prehensive ine20,000($4.50-$2.00) 10,000 gallons =fair value debit balance of $25,000;unadjusted debit balance = $5,000from June 1 entry.)8/01/11Cash30,000Aviation gas contr

48、act option25,000Other prehensive ine5,000(Net settlement = ($5 - $2) 10,000 gallons = $30,000 received)Aviation gas inventory200,000Cash200,000(40,000 gallons $5 per gallon)8/15/11Cost of goods sold200,000Aviation gas inventory200,000Other prehensive ine25,000Cost of goods sold25,000Objective: LO3Di

49、fficulty: Difficult4) On November 1, 2011, Moddel pany (a U.S. corporation) entered into a 90-day forward contract to purchase 200,000 British pounds. The purpose of the forward contract is to hedge a mitment to purchase special equipment on January 30, 2012 from a British firm Jeckyl Inc. The invoi

50、ce price on the purchase mitment is denominated in British pounds. The forward contract is not settled net. Assume Moddel uses a 12% interest rate. Use a fair value hedge.The relevant e*change rates are stated in dollars per pound:Forward RateSpot Rateto Jan. 30, 2012November 1, 2011$1.32$1.35Decemb

51、er 31, 2011$1.47$1.50January 30, 2012$1.55-Required:1.What journal entry did Moddel record on November 1, 20112.What journal entries did Moddel record on December 31, 20113.What journal entries did Moddel record on January 30, 2012 if the purchase was madeAnswer: 11/01/11Contract receivable (pounds)

52、270,000Contract payable270,000(200,000 $1.35)12/31/11Contract receivable (pounds)30,000E*change gain30,000200,000 ($1.50 - $1.35)E*change loss30,000Change in value of firm mitment in pounds30,000200,000 ($1.50 - $1.35)01/30/12E*change loss10,000Change in value of firm mitment in pounds10,000200,000

53、($1.55 - $1.50)Contract receivable (pounds)10,000E*change gain10,000200,000 ($1.55 - $1.50)Contract payable270,000Cash270,000Cash (pounds) 200,000 $1.55310,000Contract receivable (pounds)310,000Equipment270,000Change in value of firm mitment40,000 in poundsAccounts payable (pounds)310,000Accounts pa

54、yable (pounds)310,000Cash (pounds)310,000Objective: LO3Difficulty: Difficult5) On November 1, 2010, Mayberry Corporation, a U.S. corporation, purchased from Cantata Corporation, a Me*ican pany, some machinery that cost 1,000,000 pesos. The invoice was payable in pesos on January 30, 2011. To hedge a

55、gainst rapid changes in the peso, Mayberry entered into a forward contract on November 1, 2010 with AB Trader & pany, a US brokerage and investment firm. The contract specified that Mayberry would buy 1,000,000 pesos from AB Trader at $0.084 per peso for settlement on January 30, 2011.Assume that al

56、l three panies are subject to the same accounting standards and have December 31st year-ends. The spot rates for pesos on November 1, December 31, and January 30, are $0.082, $0.080, and $0.089, respectively. The 30-day forward rate for pesos on December 31, 2010 is $0.083. The forward contract is n

57、ot settled net.Required:Record General Journal entries for Mayberry Corporation on November 1, December 31, and January 30. If no entry is required on a particular date, indicate No entry in the General Journal. This is a fair value hedge.Answer: Mayberrys General JournalDateAccount NameDebitCredit1

58、1/01/10Machinery82,000Accounts Payable (pesos)82,00011/01/10Contract Receivable (pesos)84,000Contract Payable84,00012/31/10Accounts Payable (pesos)2,000E*change Gain2,000(.082 - .080) 1,000,000)12/31/10E*change Loss1,000Contract Receivable (pesos)1,000($.083 - $.084) 1,000,00001/30/11E*change Loss9,

59、000Accounts Payable (pesos)9,000(.089 - .080) 1,000,000Contract Receivable (pesos)6,000E*change Gain6,000(.089 - .083 ) 1,000,000Cash (pesos)89,000Contract payable84,000Contract Receivable (pesos)89,000Cash84,000Accounts Payable (pesos)89,000Cash (pesos)89,000Objective: LO4Difficulty: Moderate6) On

60、November 1, 2010, Athom Corporation purchased 5,000 television sets for its merchandise inventory from Sockk, a South Korean firm, at a total quoted cost of 600,000,000 won (W). On this date, the spot rate for the won was $1 = 1,080W. On the same day, Athom invested $500,000 cash in a non-interest b