Question: P 13-2 Sale commitments, entries, no net settlement US Mill, Inc. sold merchandise to Jang Ltd. for 25,000,000,000 Korean Won, on October 1, 2014. The

P 13-2

Sale commitments, entries, no net settlement

US Mill, Inc. sold merchandise to Jang Ltd. for 25,000,000,000 Korean Won, on October 1, 2014. The billing date is on October 1, 2014 and payable in 120 days, on January 30, 2015. Mill decided to enter a forward contract to deliver 25,000,000,000 Korean Won to its exchange broker in 180 days. No netsettlement is allowed for the contract. Assume an annual interest rate of 12 percent. Selected exchange rate for Korean won is as follows:

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