On December 1, 2021, MAS Company sold goods on account to Lebanon Company. The amount of sale
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On December 1, 2021, MAS Company sold goods on account to Lebanon Company. The amount of sale was 44,625 Lebanon pounds. The Lebanon Company will settle the account on January 2, 2022. On December 1, the spot rate was 40 Lebanon pounds for one Philippine peso.
Also, on December 1, MAS Company entered into a future contract to sell the 44,625 Lebanon pounds on January 2, 2022 at a forward rate of 25 Lebanon pounds for one Philippine peso. The spot rate and forward rate for one Philippine peso on December 31, 2021 is 30 Lebanon pounds and 50 Lebanon pounds, respectively.
How much is the foreign exchange loss on hedging instrument?
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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