A U S company reports a forward contract as a cash flow hedge of a forecasted purchase of merchandise, payment to be made in Hong Kong dollars How is hedge accounting used in this situation Select one a Hedge accounting is used for both the forecasted purchase and the forward contract b Normal accounting is used for both the forecasted purchase and the forward contract c Hedge accounting is used for the forward contract The forecasted purchase is reported normally d Hedge accounting is used for the forecasted purchase The forward contract is reported normally

The Answer is in the image, click to view ...

Question: A U . S . company reports a forward contract as a cash flow hedge of a forecasted purchase of merchandise, payment to be made

A U

.

.

company reports a forward contract as a cash flow hedge of a forecasted purchase of merchandise, payment to be made in Hong Kong dollars. How is hedge accounting used in this situation?

Select one:

.

Hedge accounting is used for both the forecasted purchase and the forward contract.

.

Normal accounting is used for both the forecasted purchase and the forward contract.

.

Hedge accounting is used for the forward contract. The forecasted purchase is reported normally.

.

Hedge accounting is used for the forecasted purchase. The forward contract is reported normally.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Question 20 1 pts A U.S. company reports a forward contract as a cash flow hedge of a forecasted sale of merchandise to a U.K. customer, payment to be received in pounds. When are gains and losses on...

Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,900 cases of Oktoberfest-style beer from a German supplier for 551,000 euros. Relevant U.S. dollar exchange rates for the euro...

Pacico Company. a U.S.-based importer of beer and wine. purchased 1,900 cases of Oktoberfest-style beer from a German supplier for 551,000 euros. Relevant US. dollar exchange rates for the euro are...

Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,800 cases of Oktoberfest-style beer from a German supplier for 504,000 euros. Relevant U.S. dollar exchange rates for the euro...

Paclfico Company, a U.S.-based Importer of beer and wine, purchased 1,100 cases of Oktoberfest-style beer from a German supplier for 231,000 euros. Relevant U.S. dollar exchange rates for the euro...

Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,700 cases of Oktoberfest-style beer from a German supplier for 476,000 euros. Relevant U.S. dollar exchange rates for the euro...

Problem 7-42 (Algo) (LO 7-2, 7-7, 7-8) Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,700 cases of Oktoberfest-style beer from a German supplier for 459,000 euros. Relevant...

Q.4 GEX Pacifico Company, a U.S.-based importer of beer and wine, purchased 1400 cases of Oktoberfest-style beer from a German supplier for 336.000 euros. Relevant U.S. dollar exchange rates for the...

Please answer all parts listed, thank you! Required A Required B Required c Required D Required E Assume that, on August 15, the company forecasted the purchase of beer on October 15. On August 15,...

Pacifico Company, a U.S based importer of beer and wine, purchased 1,300 cases of Oktoberfest-stye beer from a German supplier for 299,000 euros. Reievant LIS dollar exchange rates for the euro are...

Determine by direct integration the centroid of the area shown.

The following four events are noted in a marketplace: 1. The price of chicken goes up. 2. The price of beef goes up. 3. The demand for chicken shifts. 4. The quantity consumed of chicken increases....

Which of the following is the definition of a cOntrol risk This suspect of material statement assuming there are no relay related internal control policy or procedures the risk that material mist...

In Medical Sociology, we see that African-American males tend to live somewhat shorter lives than their male counterparts in various races. Based on researchers, what are some factors that may...