Tagum College: Self-Instructional Manual (SIM) For Self-Directed Learning (SDL)

UNIVERSITY OF MINDANAO
Tagum College
Department of Accounting Education

Accountancy Program
Physically Distanced but Academically Engaged
Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)
Course/Subject: ACP 313– Accounting for Government and Non-

Profit Organization
Name of Teacher: Jon D. Inocentes,CPA
THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

REPRODUCTION AND DISTRIBUTION OUTSIDE OF ITS INTENDED USE.
THIS IS INTENDED ONLY FOR THE USE OF THE STUDENTS WHO ARE
OFFICIALLY ENROLLED IN THE COURSE/SUBJECT.
EXPECT REVISIONS OF THE MANUAL.
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116
Davao del Norte
Telefax: (084) 655-9591, Local 116
Table of Contents
Page
Part 1. Course Outline and Policies................................................................. 1

Part 2. Instruction Delivery
CC’s Voice............................................................................………….. 5
Course Outcomes................................................................................. 5
Big Picture A: Unit Learning Outcomes ............................................... 6
Big Picture in Focus:ULOa……………………………………………….. 6
Metalanguage....................................................................................... 6
Essential Knowledge............................................................................ 6
Self-Help............................................................................................... 15
Let’s Check........................................................................................... 15
Let’s Analyze......................................................................................... 18
In a Nutshell.......................................................................................... 19
Q&A List................................................................................................ 19
Keywords Index.................................................................................... 19
Big Picture in Focus:ULOb……………………………………………….. 20
Metalanguage....................................................................................... 20
Self-Help............................................................................................... 36
Let’s Check........................................................................................... 36
Let’s Analyze......................................................................................... 40
In a Nutshell.......................................................................................... 41
Q&A List................................................................................................ 41
Keywords Index.................................................................................... 42
Big Picture B: Unit Learning Outcomes ............................................... 42

Metalanguage....................................................................................... 42
Self-Help............................................................................................... 50
Let’s Check........................................................................................... 51
Let’s Analyze......................................................................................... 53
In a Nutshell.......................................................................................... 55
Q&A List................................................................................................ 55
Keywords Index.................................................................................... 56
Big Picture C: Unit Learning Outcomes ............................................... 56

Metalanguage....................................................................................... 56
Self-Help............................................................................................... 69
Let’s Check........................................................................................... 70
Let’s Analyze......................................................................................... 73
In a Nutshell.......................................................................................... 74
Q&A List................................................................................................ 74
i
Davao del Norte
Telefax: (084) 655-9591, Local 116
Keywords Index.................................................................................... 74
Big Picture D: Unit Learning Outcomes ............................................... 75

Metalanguage....................................................................................... 75
Self-Help............................................................................................... 99
Let’s Check........................................................................................... 99
Let’s Analyze......................................................................................... 106
In a Nutshell.......................................................................................... 106
Q&A List................................................................................................ 107
Keywords Index.................................................................................... 107
Big Picture in Focus:ULOb……………………………………………….. 107
Metalanguage....................................................................................... 107
Self-Help............................................................................................... 119
Let’s Check........................................................................................... 120
Let’s Analyze......................................................................................... 124
In a Nutshell.......................................................................................... 124
Q&A List................................................................................................ 125
Keywords Index.................................................................................... 125
Part 3. Course Schedule................................................................................. 126

Online Code of Conduct...................................................................... 127
Monitoring of OBD and DED............................................................... 127
Work Plan………………………………………………………………….. 130
Davao del Norte
Telefax: (084) 655-9591, Local 116
ACP 313: Accounting for Government and Non-profit

organization
Course Facilitator : Jon D. Inocentes , CPA

Email : jdinocentes@yahoo.com.ph
Student Consultation : Done online (LMS) or traditional contact
(calls, text, emails)
Mobile : 0912-781-3586
Phone : None
Effectivity Date : August 2020
Mode of Delivery : Distance Education Delivery (DED)
Time Frame : 54 hours
Student Workload : Expected Self-Directed Learning
Pre-requisite : Comed 411
Credit : 3 units
Attendance Requirement : For online sessions: minimum of 95% attendance
For 1-day on campus/onsite review: 100%
attendance; for 1-day on-campus/on-site final
exam: 100% attendance
Course Outline Policies

Areas of Concern Details
This 3-unit course self-instructional manual is
designed for distant learning mode of instructional
delivery with scheduled face to face or virtual
sessions which can be done using LMS, traditional
contact (via cellphone/telephone and SMS) and
social media platforms (e.g. email, private
messenger, Facebook, Viber, WhatsApp, Line, Zoom
Contact and Non-contact Hours and other similar applications) depending on what is
available for both teachers and students.
The expected number of hours will be 54 including

the face to face or virtual sessions. The face to face
sessions shall include the summative assessment
tasks (exams) since this course is crucial in the
licensure examination for Certified Public
Accountant.
Submission of assessment tasks shall be on the 3rd,
5th, 7th and 9th week of the class. Moreover, specific
dates of submission are specified in the Course
Schedules Section of this manual. The assessment
Assessment Task Submission paper shall be attached with cover page including the
title of assessment task (if the task is performance),
the name of the course coordinator, date of
submission and name of the student. The document
shall be submitted to the course coordinator thru LMS
Davao del Norte
Telefax: (084) 655-9591, Local 116
(Quipper), email, FB messenger or thru any means

accessible to students. It is also expected that you
already paid your tuition and other fees before the
submission of the assessment task.
If the assessment task is done in real time through

the features of LMS accessible to students, the
schedule shall be arranged ahead of time by the
course coordinator.
Since this course is included in the licensure

examination for CPAs, you will be required to take the
Multiple Choice Question Exam inside the school.
This should be scheduled ahead of time by your
course coordinator. This is non-negotiable for all
licensure-based programs.
Turnitin Submission To ensure honesty and authenticity, all assessment
(if necessary) tasks are required to be submitted thru Turnitin with
a maximum similarity index of 30% allowed. This
means that if your paper goes beyond 30%, the
students will either opt to redo her/his paper or
explain in writing addressed to the course coordinator
the reasons for similarity. In addition, if the paper has
reached more than 30% similarity index, the student
may be called for a disciplinary action in accordance
with the University’s OPM on Intellectual and
Academic Honesty.
Please note that academic dishonesty such as

cheating and commissioning other students or people
to complete the task for you have severe
punishments (reprimand, warning, expulsion).
The score for an assessment item submitted after the
designated time on the due date, without an
approved extension of time, will be reduced by 5% of
the possible maximum score for that assessment
item for each day or part day that the assessment
Penalties for Late item is late.
Assignments/Assessments
However, if the late submission of assessment paper
has a valid reason, a letter of explanation should be
submitted and approved by the course coordinator. If
necessary, you will also be required to present/attach
evidences.
Assessment tasks will be returned to you one (1)
week after the submission. This will be returned by
LMS, email, FB messenger or any other
Return of Assignments/ communication platforms available for both teacher
Assessments and students.
For some group assessment tasks, the course

coordinator will require some or few of the students
Davao del Norte
Telefax: (084) 655-9591, Local 116
for online or virtual sessions to ask clarificatory

questions to validate the originality of the assessment
task submitted and to ensure that all the group
members are involved.
You should request in writing addressed to the
course coordinator his/her intention to resubmit an
assessment task. The resubmission is premised on
Assignment Resubmission the student’s failure to comply with the similarity index
and other standards or other reasonable
circumstances e.g. illness, accidents, financial
constraints.
You should request in writing addressed to the
program coordinator your intention to appeal or
contest the score given to an assessment task. The
letter should explicitly explain the reasons/points to
contest the grade. The program coordinator shall
Re-marking of Assessment communicate with the students on the approval or
Papers and Appeal disapproval of the request.
If disapproved by the course coordinator, you can

elevate your case to the program head or the dean
with the original letter of request. The final decision
will come from the Dean of College.
You shall be evaluated based on the following:
Assessment methods Weights
EXAMINATIONS 60%
A. Exam – 1st – 3rd 30%
B. Final Exam 30%
CLASS PARTICIPATIONS 40%
C. Quizzes 10%
Grading System D. Assignments 5%
E. Research/Requirement 15%
F. Oral recitation 10%
Total 100%
Submission of the final grades shall follow the usual

University system and procedures.
Preferred Referencing Style Use the general practice of APA 6th edition.
The course coordinator shall create Group Chat in FB

messenger for the class. Each student shall create a
Quipper account. The course coordinator will then
provide a Quipper access code to the students for
them to enroll to have access to the materials and
resources of the course. All communication formats:
Student Communication chat, submission of assessment tasks, request, etc.
may be done thru any platforms available for the
convenience of teacher and students.
You can also meet the course coordinator in person

through the scheduled face to face sessions to raise
your issues and concerns.
Davao del Norte
Telefax: (084) 655-9591, Local 116
Contact Details of the Dean Dr. Gina Fe G. Israel, EdD

Email: deansofficetagum@umindanao.edu.ph
Mobile: 09099942314
Contact Details of the Larcyneil P. Pascual, MAED

Assistant Dean Email: larcyneil.pascual@umindanao.edu.ph
Mobile: 09187772524
Contact Details of the For Accountancy:
Program Head
Mary Cris L. Luzada, CPA, MSA
Email: luzadacris@umindanao.edu.ph
Mobile: 09228321794
For Accounting Technology:
Maria Teresa A. Ozoa, CPA, MBA

Email: ozoamateresa@umindanao.edu.ph
Mobile: 09472657119
Student with Special Needs Students with special needs shall communicate with
the course coordinator about the nature of his or her
special needs. Depending on the nature of the need,
the course coordinator with the approval of the
program coordinator may provide alternative
assessment tasks or extension of the deadline of
submission of assessment tasks. However, the
alternative assessment tasks should still be in the
service of achieving the desired course learning
outcomes.
Library Contact Details Clarissa R. Donayre, MSLS
Chief Librarian
Email: lictagum@umindanao.edu.ph
Mobile: 09273951639
Well Being Welfare Support Rochen D. Yntig, RGC

Help Desk Contact Details Head
Email: chenny.yntig@gmail.com
Number: 0932 7717 219
Mersun Faith A. Delco, RPm

Psychometrician
Email: mersunfaithdelco@gmail.com
Number: 0927 6086 037
Alfred Joshua M. Navarro

Facilitator
Email: is40fotb@gmail.com
Number: 0977 3416 064
Davao del Norte
Telefax: (084) 655-9591, Local 116
Course Information – see/download course syllabus from Quipper

or other available platforms
CC’s Voice: Hello, future Certified Public Accountants! Welcome to this course,
Accounting for Government and Non-profit Organization. This course will cover
Accounting for foreign currency Transactions, Translation of Foreign Currency
Financial Statements, Accounting for Government and Non-profit Organization. This
course will help you translate foreign currency Financial Statements and prepare
financial statements for Government and Non-profit Organization.
Course outcome:
As a student of this course you are expected to:
(1) Apply theories and concepts in recording foreign currency transactions and
translate foreign currency financial statements.
(2) Apply theories and concepts in recording derivative instruments.
(3) Apply accounting principles and reporting practices in recording

transactions and preparation of financial statements of not-for-profit and
government entities.
Let us begin!
Big Picture A
Week 1 TO 3: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to:
a. Record Foreign currency transactions.
b. Translate foreign currency financial statements
Big Picture in Focus: ULOa. Record Foreign currency transactions.
Metalanguage
In this section, the essential terms relevant to the home office and branch accounting of
demonstrate ULOa will be operationally defined to establish a standard frame of reference. You
will encounter these terms as we go through this course. Please refer to these definitions in case
you will face difficulty in understanding the accounting concepts concepts.
Davao del Norte
Telefax: (084) 655-9591, Local 116
Conversion. The exchange of one currency for another.
Foreign currency. A currency other than the functional currency of the reporting entity being
referred to (for example, the Philippine peso could be a foreign currency for a foreign entity).
Foreign currency transactions. Transactions whose terms are denominated in a currency other
than the reporting entity’s functional currency. Foreign currency transactions arise when an
enterprise (1) buys or sells goods or services on credit whose prices are denominated in foreign
currency, (2) borrows or lends funds and the amounts payable or receivable
are denominated in foreign currency, (3) is a party to an unperformed forward exchange contract,
or (4) for other reasons, acquires or disposes of assets or incurs or settles liabilities denominated
in foreign currency.
Functional currency. The currency of the primary economic environment in which the entity
operates; normally, the currency of the environment in which the entity primarily generates and
expends cash.
Monetary items. Cash, claims to receive a fixed amount of cash, and obligations to pay a fixed
amount of cash.
Non-monetary items. All statement of financial position items other than cash, claims to cash,
and cash obligations.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes), you need to fully understand the
following essential knowledge laid down in the succeeding pages. Please note that you are not
limited to exclusively refer to these resources. Thus, you are expected to utilize other books,
research articles and other resources that are available in the university’s library e.g. ebrary,
search.proquest.com etc., and even online tutorial websites.
Topic: ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS
FOREX TRANSACTIONS IN GENERAL

In a strict sense, foreign exchange transactions are those that are to be settled in foreign
currency, regardless of the location of either party. These are accounted for by the domestic
company by translating the amounts in foreign currency with BSP-set exchange rates.
For translation purposes, the exchange rates must be quoted directly, where the Peso is
expressed as the equivalent of one foreign currency.
Direct exchange rate

• The direct exchange rate (DER) is the number of local currency units (LCUs) needed to
acquire one foreign currency unit (FCU).
• From the viewpoint of a PH entity, the direct exchange rate can be viewed as the peso
cost of one foreign currency unit.
• The direct exchange rate ratio is expressed as follows, with the LCU, the PH peso, in the
numerator:
Davao del Norte
Telefax: (084) 655-9591, Local 116
DER = PH peso equivalent value

1 FCU
Example: 1 FC= P 25
# of FC 20,000 FC
To convert (number of FC X DER)

20,000 *25= P 500,000
Indirect Exchange Rate

• The indirect exchange rate (IER) is the reciprocal of the direct exchange rate.
• From the viewpoint of an PH entity, the indirect exchange rate can be viewed as the
number of foreign currency units that 1 PH peso can acquire.
The ratio to compute the indirect exchange rate is:
IER = 1 FCU
PH peso equivalent value
So in the preceding example one PH peso could be converted into .04 FC (1/25)
To convert ( Number of FC/ IER)

20,000/.04 = P500,000
Also, if for example 1 PHp : 0.20 FC

Number of FC = 20,000 FC
To convert : 20,000/.20 = P100,000
Or convert to DER = (1/.20) = P5 ( so Php 5 could be converted for one 1 FC)
To convert : 20,000 *5 = P100,000
Changes in Exchange Rates

Davao del Norte
Telefax: (084) 655-9591, Local 116
Davao del Norte
Telefax: (084) 655-9591, Local 116
IMPORT AND EXPORT (UNHEDGED)TRANSACTIONS

✓ In an unhedged import and export transaction, the only relevant exchange rate would be
the spot rate as of the date of the transaction, balance sheet date, and the date of
settlement.
✓ Spot rates are classified as either buying or selling (also called bid and offer rates,
respectively). If the domestic entity exports, the buying rate is used since this would be
the price that the foreign buyer would pay for the goods. If the domestic entity imports,
the selling rate is used.
✓ Suppose the domestic company exports goods on F.O.B. destination freight terms. On
the date of transaction, the spot rate to be used will be as of the date when the goods
reached the buyer the point when legal title is passed under the freight term. Of course, if
on F.O.B. shipping point, it will be when shipped.
✓ The domestic entity recognizes forex gains or losses as the spot rate changes during the
aforementioned dates only. For instance, if the domestic entity is an exporter (thus it has
outstanding accounts receivable) and the buying spot rate increases, the entity
recognizes forex gains to be recorded in profit/loss (together with an increase in
accounts receivable).
✓ The foreign entity does not record any forex gains or losses since the transaction is
denominated in their currency. The final cash payment during the date of settlement shall
of course still be at the spot rate, so is the cost at which the asset purchased is recorded
Illustration : Importing Transaction (Exposed liability)

To illustrate an importing transaction (an exposed liability), assume that on November 1, 2014
one firm ordered 1,000 units of inventory from a U.S firm for $20,000. The inventory was shipped
and invoiced to the Philippine firm on December 1, 2014, to be paid on March 1, 2015. The firm’s
fiscal year-end is December 31. Assume further that the Philippine firm did not engage in any
form of hedging activity. The spot rates for U.S dollars at various times are as follow:
Davao del Norte
Telefax: (084) 655-9591, Local 116
It should be noted that the date of commitment does not give rise to any liability because it may
be cancelled any time by the buyer; therefore, there is no required entry on November 1,2014.
The Philippine firm would prepare the following journal entry on December 1,2014:
December 1,2014 (Transaction date):
At the balance sheet date, the accounts payable denominated in foreign currency is adjusted
using the exchange rate (spot rate) in effect at the balance sheet date (known as the closing or
current rate). The journal entry on:
December 31,2014 (Balance sheet date):
If the exchange rate had declined below P40.55 for example to P40.50, the Philippines would
have recognized a gain of P1,000 since it would take only P810,000 ($20,000*P40.50) to settle
the P811,000 recorded liability.
On the settlement date, the Philippine firm must buy dollars in order to satisfy the liability. With
change in the exchange rate to P40.65, the firm must buy P813,000 ($20,000*P40.65) on March
1,2015, to acquire the $20,000. The journal entry on:
March 1,2015 (Settlement date):
Over the three-month period, the decision to delay making payment cost the firm P2,000 (the
P813,000 cash paid less the original payable amount of P811,000). This net amount was
recognized as a loss of P5,000 in 2014 and a gain of 3,000 in 2015.
Note in the preceding example that on December 31, the balance sheet date, a transaction loss
was recognized on the open account payable. Such a loss is considered unrealized because the
account has not yet been settled or closed. When an account payable (or receivable) is settled
or closed, a transaction gain or loss on the settlement is considered realized.
Davao del Norte
Telefax: (084) 655-9591, Local 116
Illustration : Exporting Transaction (Exposed Asset)

On November 1, 2014, a Philippine firm received an order for 100 units of inventory for $50,000
to a U.S. firm. The Philippine firm shipped the inventory and billed the U.S. firm on December
1,2014. The Philippine firm received the customer’s remittance in full on March 1,2015. The firm’s
fiscal year-end is December 31. Assume further that the Philippine firm did not engage in any
form of hedging activity. The spot for U.S. dollars at various times are as follow:
The Philippine firm would prepare the following journal entry on December 1,2014:
December 1,2014 (Transaction date):
At the balance sheet date, the accounts receivable denominated in foreign currency is adjusted
using the exchange rate (spot rate) in effect at the balance sheet date (known as the closing or
current rate). The entry is
December 31,2014 (Balance sheet date):
March 1, 2015 (Settlement date)
FOREIGN DEBT TRANSACTIONS

✓ Just like purchase of commodities, forex gains/losses are also recognized in foreign
debt borrowings/grants. Also, the purchase of the goods might have been made through
issuance of promissory notes and other debt instrument.
✓ If the domestic entity is a borrower, it must use the selling spot rate, and the buying spot
rate if it lends
Davao del Norte
Telefax: (084) 655-9591, Local 116
ILLUSTRATION
Melrose issued a promissory note denominated in foreign currency for the purchase made from
an Italian supplier. The following were related transactions; ( in Italy Lire). On December 1,2016
Melrose Corporation purchased merchandise from an Italian supplier for 60- day 18% promissory
note for 108,000 Italy lire, at a selling rate 1 FC to 74.20 . On December 31, the selling spot rate
is 1FC to 74.85. On January 31, 2017 the selling spot rate is 1 FC to P 75.75.
Journal entries to record the transaction are as follows:

Davao del Norte
Telefax: (084) 655-9591, Local 116
Self-Help: You can also refer to the sources below to help you further understand the
lesson.
Dayag, A. J. (2015). Advanced financial accounting: A comprehensive and procedural approach(2016 ed.
Vol. 2). Manila: Lajara pub. House.
Guerrero, P., & Peralta, J. (2013). Advanced accounting (Vol. 2). Manila: GIC Enterprise & Co.,
Inc.
Let’s Check
I. Questions:
1. What are foreign currency transactions?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
2. Distinguish spot rates and future rates (forward rates).
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
II. Multiple Choice:
1. An entity started trading in country A, whose currency was the dollar. After several years the
Davao del Norte
Telefax: (084) 655-9591, Local 116
entity expanded and exported its product to country B, whose currency was the euro. The business was
conducted through a subsidiary in country B. The subsidiary is essentially an extension of the entity’s own
business, and the directors of the two entities are common. The functional currency of the subsidiary is
The dollar b. The euro c. The dollar or the euro d. Difficult to determine
2. Initially, a foreign currency transaction shall be recorded by applying to the foreign currency amount
a. The spot exchange rate at the date of transaction.
b. The closing rate at the end of reporting period
c. The average exchange rate during the year
d. The spot exchange rate at the date of the settlement of the transaction.
3. Exchange differences arising from foreign currency transactions shall

a. Be recognized in profit or loss of the period in which they arise
b. Be included in other comprehensive income
c. Be deferred and amortized over a reasonable period
d. Be charged to retained earnings
4. A foreign currency transaction is a transaction which is denominated or requires settlement in a foreign

currency and includes
I -Purchase and sale of goods and services whose price is denominated in a foreign currency.
II-Borrowing and lending of funds when the amounts payable or receivable are denominated in a foreign currency.
a. I only. b. II only. c. Both I and II d. Neither I nor II
5. The forward rate may be defined as

a. The price a foreign currency can be purchased or sold today.
b. The price today at which a foreign currency can be purchased or sold in the future.
c. The forecasted future value of a foreign currency.
d. The U.S. dollar value of a foreign currency
On November 29, 20x1, ABC Co. received a non-cancellable sale order for the exportation of
inventories from a UK-based company. The contract price is £40,000 (pound sterling). The
contract term is FOB shipping point. The inventories were shipped on December 1, 20x1. The
sale was settled on January 3, 20x2.
The following are the exchange rates:

November 29, 20x1………………………………………..₱67:£1
December 1, 20x1………………………………………….₱68:£1
December 31, 20x1………………………………………..₱70:£1
January 3, 20x2…………………………………………….₱71:£1
6. How much sale revenue is recognized in 20x1?

a. 2,680,000 b. 2,720,000 c. 2,800,000 d. 2,840,000
7. How much FOREX gain (loss) is recognized in 20x1?

a. 120,000 b. (120,000) c. 80,000 d. (80,000)
8. How much FOREX gain (loss) is recognized in 20x2?

a. 40,000 b. (40,000) c. 120,000 d. 160,000
9. How much is the total FOREX gain (loss) resulting from the sale transaction?
a. 160,000 b. 120,000 c. 80,000 d. 40,000
On November 29, 20x1, ABC Co. placed a non-cancellable purchase order for the importation
of a machine with a purchase price of €40,000 from a company based in France. The contract
term is FOB shipping point. The machine was shipped on December 1, 20x1 and was received
by ABC on December 15, 20x1. The purchase price was settled on January 3, 20x2.
The following are the exchange rates:

November 29, 20x1………………………………………..₱55:€1
December 1, 20x1………………………………………….₱58:€1
December 15, 20x1………………………………………..₱57:€1
December 31, 20x1………………………………………..₱60:€1
January 3, 20x2…………………………………………….₱61:€1
10. The entry on December 1, 20x1 includes
a. a debit to accounts payable for ₱2,320,000.
b. a credit to machinery for ₱2,320,000.
c. a debit to machinery for ₱2,320,000
d. none of these
11. The total FOREX gain (loss) recognized in 20x1 is
a. 40,000 b. (80,000) c. (200,000) d. (120,000)
12. The total FOREX gain (loss) recognized in 20x2 is
a. (40,000) b. (80,000) c. (200,000) d. (120,000)
17
Davao del Norte
Telefax: (084) 655-9591, Local 116
ABC Co. had the following transactions during the last month of the current reporting period:
• Purchased raw materials from Pakistani Co., a company based in Pakistan, for 400,000
rupees on December 17, 20x1 to be settled on January 5, 20x2.
• Sold inventory to Swedish Co., a company based in Sweden, for 80,000 kroners on
December 20, 20x1 to be settled on January 5, 20x2.
The exchange rates are as follows:

Rupee Kroner
Dec. 17, 20x1…………Php 1 : PKR 2.04
Dec. 20, 20x1……………………………………… Php 1 : SEK 0.1667
Dec. 31, 20x1…………Php 1: PKR 2 Php 1 : SEK 0.2000

Jan. 5, 20x2…………..Php 1: PKR 2.083 Php 1 : SEK 0.2400
13. How much are the total FOREX gains/losses recognized by ABC Co. from the purchase
and sale transactions described above?
Purchase Sales
a. (4,048) 146,570
b. 4,048 (146,572)
c. 3,922 (66,667)
d. (3,922) 66,667
14. How much are the total FOREX gains/losses recognized by Pakistani Co. and Swedish
Co. from the purchase and sale transactions, respectively?
Pakistani Swedish
a. (4,048) 146,572
b. 3,922 (66,667)
c. (3,922) 66,667
d. 0 0
The accounts of San Pedro Corporation, a Filipino corporation, shows P81,300,000 accounts
receivable and P38,900,000 accounts payable at December 31, 2015, before adjusting entries
are made. An analysis of balances reveals the following:
Accounts receivable
Receivable denominated in Philippine Pesos P28,500,000
Receivable denominated in 34,700,000 Japanese Yen 11,800,000
Receivable denominated in 804,000 U.S. Dollars 41,000,000
Accounts payable
Payable denominated in Philippine Pesos P 6,850,000
Payable denominated in 200,000 Canadian Dollar 7,600,000
Payable denominated in 72,000,000 Japanese Yen 24,450,000
Current exchange rates for Japanese Yen, U.S. Dollars, and Canadian Dollars at December 31,
2015 are P0.3456, P51,39, and P38.55, respectively.
Determine the foreign currency exchange gain or loss that must appear on the income
statement of San Miguel Corporation for the year ended December 31, 2015.
a. P509,880 gain
b. P543,200 loss
c. P33,320 gain
Davao del Norte
Telefax: (084) 655-9591, Local 116
d. P33,320 loss
Let’s Analyze
Problem 1
OURNALIZING FOREIGN CURRENCY TRANSACTIONS
Gaw Produce Co. purchased inventory from a Japanese company on December 18, 2015.
Payment of ¥400,000 was due on January 18, 2016. Exchange rates between the dollar and the
yen were as follows:
Exchange
Date Rate
December 18, 2015 P1 = ¥125
December 31, 2015 P1 =¥122
January 18, 2016 P1 = ¥120
Required: Prepare all journal entries for Gaw Produce Co. in connection with the purchase and
payment.
PROBLEM 2
Old Colonial Corp. made a sale to a foreign customer on September 15, 2009, for 100,000 FC .
Payment was received on October 15, 2009. The following exchange rates applied:
Date Exchange Rate
September 15, 2009 FC1 = P.48
September 30,2009 FC1 = P.50
October 15, 2009 FC1 = P.44
Required:
Prepare all journal entries for Old Colonial Corp. in connection with this sale assuming that the
company closes its books on September 30 to prepare interim financial statements.
PROBLEM 3
On May 1, 2015 Jolibee, Inc. purchased from a Japanesse company for a Philippine peso
equivalent of P 800,000 to be paid June 30,2016. The exchange rates were:
May 1,2016 1 yen= P .40
December 1,2016 1 yen= P.45
June 30,2016 1 yen = P .42
Required: Assume the transaction is denominated in the local currency of units of the foreign
entities. Prepare the necessary journal entries to record the above transaction
Q&A List
In this section you are going to list what boggles you in this unit. You may
indicate your questions but noting you have to indicate the answers after your question
is being raised and clarified. You can write your questions below.
Questions/Issues Answers
Davao del Norte
Telefax: (084) 655-9591, Local 116
1.
2.
3.
4.
5.
Keyword Index
• Conversion
• Foreign Currency Transactions
• Representation
Davao del Norte
Telefax: (084) 655-9591, Local 116
Work Plan for Lecture

Days
Monday Tuesday Wednesday Thursday Friday Saturday Sunday
Modality Synchronous Asynchronous Synchronous Asynchronous Synchronous Asynchronous
Type of • Teacher to • Learner to Learner to Learner to • Learner to
Teacher to Learner
interaction Learner Content Learner Content Content
• Uploading of • Utilization of SIM • Group Sharing • Utilization of • Discussion • Utilization of
Learning a. Collab SIM (Clarification or New SIM
Materials • Videos b. Forum lessons)
c. Zoom • Videos a. Collab • Videos
• Discussion • Self-directed b. Forum
a. Collab Activities • Consultation • Self-directed c. Zoom • Self-directed
b.Forum Activities Activities
Suggested c. Zoom • Supplementary Rest
Activities Activities Day
• Giving of
Formative • Quiz
Assessment
• Consultation
• Giving of
Performance
Task
Prepared by: Reviewed by:

JON D. INOCENTES,CPA MARIA TERESA A. OZOA, CPA, MBA
Faculty Program Head
Approved by:
GINA FE G. ISRAEL, EdD
Dean of College
130

Tagum College: Self-Instructional Manual (SIM) For Self-Directed Learning (SDL)

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Tagum College: Self-Instructional Manual (SIM) For Self-Directed Learning (SDL)

Caricato da

Copyright:

Formati disponibili

UNIVERSITY OF MINDANAO

Department of Accounting Education

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)

Course/Subject: ACP 313– Accounting for Government and Non-

Name of Teacher: Jon D. Inocentes,CPA

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

Part 1. Course Outline and Policies................................................................. 1

Big Picture B: Unit Learning Outcomes ............................................... 42

Big Picture C: Unit Learning Outcomes ............................................... 56

Big Picture D: Unit Learning Outcomes ............................................... 75

Part 3. Course Schedule................................................................................. 126

ACP 313: Accounting for Government and Non-profit

Course Facilitator : Jon D. Inocentes , CPA

Course Outline Policies

The expected number of hours will be 54 including

(Quipper), email, FB messenger or thru any means

If the assessment task is done in real time through

Since this course is included in the licensure

Please note that academic dishonesty such as

For some group assessment tasks, the course

for online or virtual sessions to ask clarificatory

If disapproved by the course coordinator, you can

Submission of the final grades shall follow the usual

The course coordinator shall create Group Chat in FB

You can also meet the course coordinator in person

Contact Details of the Dean Dr. Gina Fe G. Israel, EdD

Contact Details of the Larcyneil P. Pascual, MAED

For Accounting Technology:

Maria Teresa A. Ozoa, CPA, MBA

Well Being Welfare Support Rochen D. Yntig, RGC

Mersun Faith A. Delco, RPm

Alfred Joshua M. Navarro

Course Information – see/download course syllabus from Quipper

As a student of this course you are expected to:

(2) Apply theories and concepts in recording derivative instruments.

(3) Apply accounting principles and reporting practices in recording

Big Picture in Focus: ULOa. Record Foreign currency transactions.

Conversion. The exchange of one currency for another.

Topic: ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS

FOREX TRANSACTIONS IN GENERAL

Direct exchange rate

DER = PH peso equivalent value

To convert (number of FC X DER)

Indirect Exchange Rate

The ratio to compute the indirect exchange rate is:

To convert ( Number of FC/ IER)

Also, if for example 1 PHp : 0.20 FC

To convert : 20,000/.20 = P100,000

Or convert to DER = (1/.20) = P5 ( so Php 5 could be converted for one 1 FC)

To convert : 20,000 *5 = P100,000

Changes in Exchange Rates

IMPORT AND EXPORT (UNHEDGED)TRANSACTIONS

Illustration : Importing Transaction (Exposed liability)

March 1,2015 (Settlement date):

Illustration : Exporting Transaction (Exposed Asset)

December 1,2014 (Transaction date):

December 31,2014 (Balance sheet date):

March 1, 2015 (Settlement date)

FOREIGN DEBT TRANSACTIONS

Journal entries to record the transaction are as follows:

1. What are foreign currency transactions?

2. Distinguish spot rates and future rates (forward rates).