1. On December 15, 20x1, RRR Co. sold goods to a Japanese firm for 4,000,000 yen. RRR Co. was concerned about the fluctuation in the Japanese yen, so on this date, RRR Co. entered into a 30-day forward contract to sell 4,000,000 yens for ₱1,880,000 to a bank at the forward rate of ₱0.47.
Relevant rates are shown below:

	Dec. 15, 20x1	Dec. 31, 20x1	Jan. 15, 20x2
Spot Rate	P 0.48	P 0.49	P 0.46
Forward Rate	P 0.47	P 0.485	P 0.46

a. The derivative asset (liability) to be included in the December 31, 20x1 statement of financial position is?

b. If the forward contract is settled on a net cash basis, how much is the net cash settlement receipt (payment)?

2. On December 15, 20x1, MMM Co. purchased goods from a Korean firm for 40,000wons. MMM Co. was concerned about the fluctuation in the Korean won, so on this date, MMM Co. entered into a 30-day forward contract to buy 40,000 wons for₱49,600 from a bank at the forward rate of ₱1.24.
Relevant rates are shown below:

	12/15/20x1	12/31/20x1	01/01/20x2
Spot Rate	1.20	1.26	1.30
Forward Rate	1.24	1.27	1.30

a. The total net effect of the two contracts on profit or loss in 20x2 is ________ gain/loss (-)

b. Assuming the forward contract is settled on a net cash basis, how much is the net cash settlement receipt (payment) on January 15, 20x2?

3. On October 2, 20x7, Mawet, Inc. ordered a custom-built passenger van from a Japanese firm. The purchase order is noncancelable. The purchase price is1,000,000 yens with delivery and payment to be on March 31, 20x8. On October 2,20x7, Mawet, Inc. entered into a forward contract to buy 1,000,000 yens on March 31,20x8 for P 0.57. On March 31, 20x8, the custom-built passenger van was delivered.

	10/2/x7	12/31/x7	3/31/x8
Spot Rate	P 0.50	P 0.56	P 0.57
Forward Rate	P 0.53	P 0.58	P 0.57

a. The value of the equipment on March 31, 20x8 amounted to?

b. Using the same information but this time it is accounted for as cash flow hedge, theFirm Commitment account balance on March 31, 20x8 amounted to?

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