Business, 17.06.2021 22:00 keshaayro8566

On June 1, Maxwell Corporation (a U. S.-based company) sold goods to a foreign customer at a price of 1,310,000 pesos and will receive payment in three months on September 1. On June 1, Maxwell acquired an option to sell 1,310,000 pesos in three months at a strike price of $0.096. The time value of the option is excluded from the assessment of hedge effectiveness, and the change in time value is recognized in net income over the life of the option. Relevant exchange rates and option premia for the peso are as follows: Date Spot Rate Put Option Premium for September 1 (strike price $0.063)
June 1 $0.063 $0.0026
June 30 0.069 0.0022
September 1 0.062 N/A

Alexander must close its books and prepare its second-quarter financial statements on June 30.
a. Assuming that Alexander designates the foreign currency option as a cash flow hedge of a foreign currency receivable, prepare journal entries for these transactions in U. S. dollars.
b. What is the impact on net income over the two accounting periods?
c. Assuming that Alexander designates the foreign currency option as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U. S. dollars.
d. What is the impact on net income over the two accounting periods?

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 00:00, billey32

Exercise 4-6 the following balances were taken from the books of alonzo corp. on december 31, 2017. interest revenue $86,000 accumulated depreciationâ€”equipment $40,000 cash 51,000 accumulated depreciationâ€”buildings 28,000 sales revenue 1,380,000 notes receivable 155,000 accounts receivable 150,000 selling expenses 194,000 prepaid insurance 20,000 accounts payable 170,000 sales returns and allowances 150,000 bonds payable 100,000 allowance for doubtful accounts 7,000 administrative and general expenses 97,000 sales discounts 45,000 accrued liabilities 32,000 land 100,000 interest expense 60,000 equipment 200,000 notes payable 100,000 buildings 140,000 loss from earthquake damage 150,000 cost of goods sold 621,000 common stock 500,000 retained earnings 21,000 assume the total effective tax rate on all items is 34%. prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (round earnings per share to 2 decimal places, e. g. 1.48.)

Answers: 2

continue

Business, 22.06.2019 08:10, toxsicity

Exercise 15-7 crawford corporation incurred the following transactions. 1. purchased raw materials on account $53,000. 2. raw materials of $45,200 were requisitioned to the factory. an analysis of the materials requisition slips indicated that $9,400 was classified as indirect materials. 3. factory labor costs incurred were $65,400, of which $50,200 pertained to factory wages payable and $15,200 pertained to employer payroll taxes payable. 4. time tickets indicated that $55,000 was direct labor and $10,400 was indirect labor. 5. manufacturing overhead costs incurred on account were $81,700. 6. depreciation on the company’s office building was $8,100. 7. manufacturing overhead was applied at the rate of 160% of direct labor cost. 8. goods costing $89,400 were completed and transferred to finished goods. 9. finished goods costing $76,000 to manufacture were sold on account for $105,100. journalize the transactions. (credit account titles are automatically indented when amount is entered. do not indent manually.) no. account titles and explanation debit credit (1) (2) (3) (4) (5) (6) (7) (8) (9) (to record the sale) (to record the cost of the sale) click if you would like to show work for this question: open show work

Answers: 1

continue

Business, 22.06.2019 13:20, Jasten

Suppose your rich uncle gave you $50,000, which you plan to use for graduate school. you will make the investment now, you expect to earn an annual return of 6%, and you will make 4 equal annual withdrawals, beginning 1 year from today. under these conditions, how large would each withdrawal be so there would be no funds remaining in the account after the 4th withdraw?

Answers: 3

continue

Business, 22.06.2019 16:30, cadenbukvich9923

Why is investing in a mutual fund less risky than investing in a particular company’s stock?

Answers: 3

continue

You know the right answer?

On June 1, Maxwell Corporation (a U. S.-based company) sold goods to a foreign customer at a price o...