Question

A company purchases a piece of equipment from a German supplier for €100,000, payable one month later. The company enters into a foreign-exchange forward contract whereby it agrees to purchase the euros on the payment date for the equipment.
When the order was placed: €1 = C$1.293
When the equipment was received: €1 = C$1.301
When the payment was made: €1 = C$1.3566
Foreign-exchange contract rate: €1 = C$1.2967
Required
What will the carrying value of the equipment be after the transaction has taken place (assuming the company uses hedge accounting)?


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  • CreatedJune 09, 2015
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