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On July 1, 2019, North Inc., based in Alberta, ordered merchandise from an American supplier for US$600,000. Delivery was scheduled for the month of October,

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On July 1, 2019, North Inc., based in Alberta, ordered merchandise from an American supplier for US$600,000. Delivery was scheduled for the month of October, with payment to be made in full on November 15, 2019. Once the order was placed, North entered into a forward contract with its bank to purchase US$600,000 on the settlement date at the forward rate of CDN$1.3625. The forward contract was designated as a cash flow hedge of the cash flow required to settle with the American supplier The merchandise was received on October 1, 2019, when the spot rate was US$1 = CDN$1.3575. on October 31, the company's year-end, the spot rate was $1.3690. North purchased the US dollars to pay its supplier on November 15, 2019 when the spot rate was CDN$1.3725. The forward rate to November 15, 2019, was CDNS1365 on October 1 and CDN$137 on October 31 A summary of the significant dates and exchange rates pertaining to this transaction are as follows: A summary of the significant dates and exchange rates pertaining to this transaction are as follows: Spot Rates US$1 = CDN$1.3445 Forward Rates US$1 = CDN$1.3625 18 July 1, 2019 (Order date and hedge date) October 1, 2019 (Delivery date) October 31, 2019 (Year-end) November 15, 2019 (Settlement date) US$1 = CDN$1.3575 CDN$1.369 US$1=CDN$1.3725 US$1 = CDN$1.365 CDN$137 US$1 =CDN$1.3725 "for contracts expiring on November 15, 2019 What amount will be recorded as the value of the forward contract on October 31, 2019.[year-end) if the forward contract is recorded using the net method? Multiple Choice A liability of CDN$4,500 An asset of CDN$4,500 An asset of CDN$6.000 Nil

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