1.True or False. If two or more operating segments have essentially the same business activities in essentially the same economic environments, information for those individual segments may be combined.
2. According to the FASB, the objective of segment reporting is to provide information to help users of financial statements:
3. An operating segment is defined as a component of an enterprise if:
4. Explain the difference between the spot rate and the forward rate.
5. [10 points] Lawrence Company ordered parts costing FC100,000 from a foreign supplier on May 12 when the spot rate was $0.20 per FC. A one-month forward contract was signed on that date to purchase FC100,000 at a forward rate of $0.21. The forward contract is properly designated as a fair value hedge of the FC100,000 firm commitment. On June 12, when the company receives the parts, the spot rate is $0.23. At what amount should Lawrence Company carry the parts inventory on its books?
6. On December 1, 2013, Dresden Company (a U.S. company located in Albany, NY) purchases inventory from a foreign supplier for 60,000 local currency units (LCU). Dresden will pay in 90 days after it sells this merchandise. It makes sales rather quickly and pays this entire obligation on January 28, 2014. Currency exchange rates for 1 LCU are as follows:
a. December 1, 2013 $0.88
b. December 31, 2013 $0.82
c. January 28, 2014 $.90
Prepare all journal entrie for Dresden Company in connection with the purchase and payment.