At the end of December, Gap Co., Ltd., a settlement corporation, decided to export $100 of goods
Question:
At the end of December, Gap Co., Ltd., a settlement corporation, decided to export $100 of goods on November 1, 2011, and receive the payment in five months. In order to avoid the risk of fluctuations in the exchange rate of export payments, A Co., Ltd. signed the following currency leading contracts.(Accompliance with the accounting period)
Contract Period: 5 Months (November 1, 2011 ~ March 31, 2012) Contract Terms: $100 1,1,150/$ (Currency Leading Exchange Rate) The information on the selling exchange rate is as follows.
(However, say that there is no present valuation)
| Spot exchange rate (//$) | Currency forward exchange rate ($/$) | |
| 2011.11.1 | 1,100 | 1,150 (5 months) |
| 2011.12.31 | 1,080 | 1,120(3 months) |
| 2012.3.31 | 1,180 |
1)What are the gains and losses related to foreign currency conversion on December 31, 2011 and the gains and losses of the monetary forward contract, respectively?
(Profits are positive, losses are negative)
2)What are the gains and losses related to foreign currency settlement on March 31, 2012 and the gains and losses of the currency forward contract, respectively?
(Profits are positive, losses are negative)
