Sean, Inc., a retailer based in the United States, entered into a forward contract with 250,000,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sean, Inc., a retailer based in the United States, entered into a forward contract with €250,000, payable in 90 days to Queen NV in the Netherlands to hedge its, purchase transaction on November 1, 2014. The 90-day forward contract allowed net settlement. Assume a 12 percent interest rate annually. Selected exchange rates for the euro are as follows: Nov 1, 2014 Dec 31, 2014 Jan 30, 2015 Spot rate 90-day forward rate 30-day forward rate $0.78 $0.75 $0.80 $0.82 $0.79 REQUIRED: Prepare all journal entries and adjusting entries to account for the transaction above. Sean, Inc., a retailer based in the United States, entered into a forward contract with €250,000, payable in 90 days to Queen NV in the Netherlands to hedge its, purchase transaction on November 1, 2014. The 90-day forward contract allowed net settlement. Assume a 12 percent interest rate annually. Selected exchange rates for the euro are as follows: Nov 1, 2014 Dec 31, 2014 Jan 30, 2015 Spot rate 90-day forward rate 30-day forward rate $0.78 $0.75 $0.80 $0.82 $0.79 REQUIRED: Prepare all journal entries and adjusting entries to account for the transaction above.
Expert Answer:
Answer rating: 100% (QA)
Solution Queen NV in the Netherlands to hedge its purchase transaction on November 1 2014 Goods Purc... View the full answer
Related Book For
Accounting Information Systems
ISBN: 978-0133428537
13th edition
Authors: Marshall B. Romney, Paul J. Steinbart
Posted Date:
Students also viewed these accounting questions
-
A financial analyst based in the United States has computed both accounting and NPV breakeven sales levels for a project under consideration using straight-line depreciation over a 6-year period. The...
-
Assume that a person living in the United States thinks that international trade is important for the economy, yet still believes that U. S. manufacturers of consumer goods must survive. What percent...
-
The distance between two cities in the United States can be approximated by the following formula where lat1 and long1 are the latitude and longitude of city 1 and lat2 and long2 are the latitude and...
-
Benny sells an apartment building. His adjusted basis for regular income tax purposes is $450,000, and it is $475,000 for AMT purposes. He receives $700,000 from the sale. a. Calculate Bennys gain...
-
Differentiate between a stock dividend and a stock split.
-
Figure 5.3 illustrates the Bayesian belief network for the data set shown in Table 5.3. (Assume that all the attributes are binary). (a) Draw the probability table for each node in the network. (b)...
-
Suppose there are \(n\) assets. Asset \(i, i=\) \(1,2, \ldots, n\), has rate of return \(r_{i}\) over a single period. There is also a risk-free asset with rate of return \(r_{f}\). The log-optimal...
-
WinCo Foods, a large discount grocery retailer in the western United States, promotes itself as the lowest priced grocery retailer. In newspaper ads WinCo Foods published a price comparison for...
-
What are the total plant assets? The following accounts were taken from the Adjusted Trial Balance columns of the work sheet: Land Service Revenue Rent Expense Insurance Expense Prepaid Insurance...
-
In 20X2, the new CEO of Watsontown Electric Supply became concerned about the companys apparently deteriorating financial position. Wishing to make certain that the grim monthly reports he was...
-
Equipment acquired on January 6 at a cost of $358,800, has an estimated useful life of 10 years and an estimated residual value of $46,800. a. What was the annual amount of depreciation for the Years...
-
A vehicle purchased for $ 7 5 , 0 0 0 has depreciated $ 3 5 , 0 3 9 as of Janurary 1 of this year. The vehicle is sold Januray 1 for for $ 4 1 , 9 3 2 . What is the gain or loss on this sale?
-
Describe five (5) basic components of a good mission statement. List three (3) resistance to change strategies. Give an example when you would use each method or approach.
-
Create an 8 - 1 0 slide power point presentation on Capital Budgeting and follow the presentation rubric " In your presentation you must list the criteria used to evaluate how cash flows influence...
-
What is the main difference between the cash and accrual bases of accounting?
-
income statement for the month of June, what would be his contribution margin?
-
Please watch the following video to answer the question: You MUSt watch them. Expect a good rating Video Links: https://www.youtube.com/watch?v=vNfy_AHG-MU https://www.youtube.com/watch?v=90qpziPNRnY...
-
Inexhaustible collections of ONPOs are not required to be capitalized or depreciated, if certain criteria are met. Why is this so, and what accounting and reporting recognition, if any, is required...
-
The UCLA computer lab was filled to capacity when the system slowed and crashed, disrupting the lives of students who could no longer log into the system or access data to prepare for finals. IT...
-
How would accounts payable be reflected in an REA diagram? Why?
-
Examine Figure and Table. Why do the Inventory, Customers, and Suppliers tables all have an attribute that contains data about the balance at the beginning of the current fiscalperiod? TABLE 18-1...
-
The suitability concern discussed by Kroll and Park most likely deals with: A. governance. B. transparency. C. investment horizon. Kevin Kroll is the chair of the investment committee responsible for...
-
Which of Parks statements regarding the asset allocation approaches is correct? A. Only Statement 3 B. Only Statement 4 C. Both Statement 3 and Statement 4 Kevin Kroll is the chair of the investment...
-
Based on the forecasted environment, liquidity planning should take into account that general partners may: A. call capital at a slower pace. B. make distributions at a faster pace. C. exercise an...
Study smarter with the SolutionInn App