Distinguish between spot rates and forward rates, and explain when the use of each rate is appropriate.

1.ABC Company purchases goods from a foreign country and receives an invoice for

 

FC100 000. At the date of purchase the exchange rate is A$1 5 FC6.10; at the date of

settlement two months later the exchange rate is A$1 5 FC6.50. ABC Company complies

with the requirements of AASB 121.

(a) Does ABC Company gain or lose by the exchange rate fluctuation? Explain.

(b) Would your answer to (a) be different if the purchase price had been invoiced in

Australian dollars?

2. Distinguish between buying and selling rates of exchange. Explain why there is a difference

between the two rates.

3.Distinguish between spot rates and forward rates, and explain when the use of each rate

is appropriate.

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Determine the trust’s Net Income For Tax Purposes and Taxable Income for the current year.

During the current year, the Jordan family trust, an inter vivos trust, has business income of $220,000. Of this amount, $50,000 is retained in the trust with a joint election….

Indicate the tax effects of these transactions on the Net Income For Tax Purposes for both the trust and for Bryan.

During 2020, the Ho family trust received eligible dividends from publicly traded Canadian corporations in the amount of $100,000. In addition, it received non-eligible dividends from the family owned Canadian….

compare the tax consequences for both Martin and the trust if the sale takes place in December 2020

The Husak family trust has only one beneficiary, Martin Husak, the 32 year old son of the settlor, Dimitri Husak. It is an inter vivos trust and its only asset….