Taste Bits Inc

question 21

Multiple Choice

Taste Bits Inc. purchased chocolates from Switzerland for 200,000 Swiss francs (SFr) on December 1, 20X8. Payment is due on January 30, 20X9. On December 1, 20X8, the company also entered into a 60-day forward contract to purchase 100,000 Swiss francs. The forward contract is not designated as a hedge. The rates were as follows:

-Based on the preceding information,the entries on January 30,20X9,include a:

• A) Debit to Dollars Payable to Exchange Broker, $180,000.
• B) Credit to Cash, $184,000.
• C) Credit to Premium on Forward Contract, $4,000.
• D) Credit to Foreign Currency Receivable from Exchange Broker, $180,000.

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Definitions:

Infrastructure

The fundamental physical and organizational structures and facilities (e.g., buildings, roads, power supplies) needed for the operation of a society or enterprise.

Business Equipment

Tangible assets such as machinery, computers, and tools that are used in the operation of a business to carry out various tasks.

Agricultural Machinery

Machines and equipment used in farming to aid in the production of crops and livestock, such as tractors and harvesters.

Financial Institutions

Organizations that provide financial services, like banks, insurance companies, and stock exchanges.