Current level; current level
Current level; service betterment
Service betterment; current level
Service betterment; service betterment
On October 1, 2013, Biddle Corporation purchases equipment from a supplier in France on account at a purchase price of 40,000 euro and denominates the transaction in euros. Biddle Corporation must pay the 40,000 on March 31, 2014. To protect its cash flows, Biddle Corporation purchases a forward currency contract on October 1, 2013, for 40,000 at a forward exchange rate for settlement on March 31, 2014, of 1 = $1.32. Biddle Corporation designates the forward contract as a cash flow hedge. The forward exchange rate on December 31, 2013, for settlement on March 31, 2014, is 1 =$1.35, and the actual exchange rate on March 31, 2014, is 1 = $1.40. Ignore discounting of cash flows in this exercise. The following summarizes this information:
DateOctober 1, 2013December 31, 2013June 30, 2014Type of Exchange RateForward Rate for March 31, 2014,SettlementForward Rate for March 31, 2014,SettlementActualExchangeRate 1=$1,321=$1.351=$1,40Amount inEuros40,00040,00040,000EquivalentU.S DollarAmount$52,980$54,000$56,000
c. What is the fair value of the forward contract on March 31, 2014, just before settling the transaction?
Mayfair Co. completed the following transactions and uses a perpetual inventory system.
June 4 Sold $650 of merchandise on credit (that had cost$400) to Natara Morris, terms n/ 15. 5 Sold $6,900 of merchandise (that had cost$4,200) to customers who used their Zisa cards. Zisa charges a 3% fee. 6 Sold $5.850 of merchandise (that had cost$3,800) to customers who used their Access cards. Access charges a 2% fee. 8 Sold $4,350 of merchandise (that had cost$2,900) to customers who used their Access cards. Access charges a 2% fee. 13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $429 balance in McKee's account was from a credit sale last year. 18 Received Morris's check in full payment for the June 4 purchase.
Prepare journal entries to record the preceding transactions and events.
Refer to Amazon.com, Inc.’s consolidated financial statements on its website.
Examine Note 11—Income Taxes—in the Notes to Consolidated Financial Statements. Income tax provision is another title for income tax expense. What was Amazon.com, Inc.’s income tax provision in 2012? How much did the company pay in federal income taxes? In general, why were these amounts different? What was the company’s marginal tax rate in 2012? Why?