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Business, Accounting/Business Analysis/Financial Reporting

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Business, Accounting/Business Analysis/Financial Reporting - OtherDescription:p7 34Problem:on june 1, Hamilton corporation purchased good from a foreign supplier at a price of 1,000,000 markas it will make payment in three months on september 1. Hamilton acqured an option to purc...there is moreshow problem;on june 1, Hamilton corporation purchased good from a foreign supplier at a price of 1,000,000 markas it will make payment in three months on september 1. Hamilton acqured an option to purchase 1,000,000 markas in three monts at a strike price of 0.085 Relevent exchange rates and option premia for the make are as follows;Date sport rate call option premium for september (strike price);june1 0.085 0.085;june 30 0.088 0.002;september 1 0.090 0.004;Hamilton must close its books and prepare its second quarter financial statements on june 30;a) Assumuming that Hamilton designates the foregin currency option as a cash flow hege of a foregin currency payable journal entries for these transaction in US. dollor. what is the impact on net income over the two accounting periods;b) Assumuming that Hamilton designates that foregin currency option as a fair value hedge of a foregin currency payable, prepare journal entries for these transaction in US. dollars. what is the impact on net income over the two accounting periods

 

Paper#33714 | Written in 18-Jul-2015

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