On September 1, 2013, Jensen Company received an order to sell a machine to a customer in
Question:
Date...........................US. Dollar per
...............................Canadian Dollar
September 1,2013......................$0.80
December 31, 2013......................0.79
March 1,2014.............................0.77
Jensen Company's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803.
What was the net impact on Jensen Company's 2013 income as a result of this fair value hedge of a firm commitment?
a. 5-0-.
b. $680.30 decrease in income.
c. $300 increase in income.
d. $980.30 increase in income.
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Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-0077667061
5th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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