Business, 07.05.2021 18:10 drastipatel18

On December 1, 2020, Venice Company (a U. S.-based company) entered into a three-month forward contract to purchase 1,010,000 pesos on March 1, 2021. The following U. S. dollar per peso exchange rates apply: Date Spot Rate Forward Rate
(to March 1, 2021)
December 1, 2020 $ 0.009 $ 0.012
December 31, 2020 0.011 0.014
March 1, 2021 0.015 N/A
Ignoring present values, Which of the following correctly describes the manner in which Venice Company will report the forward contract on its December 31, 2020, balance sheet?
A. As a liability in the amount of $2,020
B. As an asset in the amount of $1,010
C. As a liability in the amount of $1,010
D. As an asset in the amount of $2,020

Answers: 2

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On December 1, 2020, Venice Company (a U. S.-based company) entered into a three-month forward contr...