Question: Please answer all questions: P 13-2 Fair-value hedge, option incremental borrowing rate is reasonable. 1. Why would you expect this situation to qualify for hedge

Please answer all questions:

Please answer all questions: P 13-2 Fair-value hedge, option incremental borrowing rate

P 13-2 Fair-value hedge, option incremental borrowing rate is reasonable. 1. Why would you expect this situation to qualify for hedge accounting? 2. Why should this hedge be accounted for as a fair-value hedge instead of as a cash-flow hedge? 3. What entries should be made on May 1, 2016, to account for the firm commitment and the option? 4. Assume that the market price for Grade A silver is \$ \\$ 15 \$ per troy ounce on December 31,2016 . What are the required entries

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!

In its 2001 annual report, investors of Adelphia Communications were startled to find a footnote in its financial statements that reported the company had guaranteed as much as $2.7 billion in loans...

P 1 3 - 2 Fair - value hedge, option Ins makes sophisticated medical equipment. A key component of the equipment is Grade A silver. On May 1 , 2 0 1 6 , Ins enters into a firm purchase agreement to...

Ins makes sophisticated medical equipment. A key component of the equipment is Grade A silver. On May 1, 2016, Ins enters into a firm purchase agreement to buy 1,200,000 troy ounces (equal to 100,000...

Please answer all questions and provide account names and amounts for the journal entries! P 13-2 Fair-value hedge, option incremental borrowing rate is reasonable. 1. Why would you expect this...

PLEASE HELP ME!! I can't figure out these answers Prepare a horizontal analysis of the Income Statement for the most current year. (See page 18-11 for the proper format). Note you MUST USE EXCEL to...

9. (9 points) Calculate the following profitability ratios for the current year and give a one sentence description of each result. a. Profit Margin Ratio b. Rate of return on Total Assets c. Return...

FOR QUESTIONS 13-15: LOOK AT THE NOTES TO THE FINANCIAL STATEMENTS (beginning on page 6) 13. (1 Point) In what state did Sprouts Farmers Market, Inc. incorporate? 14. (1 Point) For 2019, what...

Required: Refer to the statements and notes and answer the following questions. a) What type of income statement format does the company use (single, multiple step, condensed)? Explain clearly why...

Please use the following documents to answer: What. are the two kinds of accounting leases that Southwest reports on its balance sheet? Which balance sheet account has changed most noticeably with...

Interbank offered rates (IBOR) reform disclosure Phase 2 In August 2020, the IASB issued IBOR reform - Phase 2, which amends FRS 16 Leases. Leases The Bank assesses at contract inception whether a...

Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an...

On March 1, Pimlico Corporation (a U.S.-based company) expects to order merchandise from a supplier in Sweden in three months. On March 1, when the spot rate is $0.10 per Swedish krona, Pimlico...

Citigroup sells a call option on euros (contract size is 500,000) at a premium of $0.04 per euro. If the exercise price is $1.34 and the spot price of the euro at expiration is $1.36, what is...

Question 3 1 5 pts Yaleta is a country of two lundred thousaed people on a medium sire island in the South Atlantic. Legal matters are decided by elected Law Gurus. The people of Yaleta over one...

9. (15 points) A company is considering a new project that requires an investment of \$5 million. The project is expected to generate cash flows of $2 million in year 1,$3 million in year 2, and $4...

Ethics. Teamwork. Form a team of three to five students. Each of you will listen to a television news show for one week or read the daily newspaper to identify situations reported in the news that...

How do these technology tools change communication use: Wi-fi, podcasts, and blogs? (Objective 1)

Describe two types of laws that affect agreements between two or more parties. (Objective 3)