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International Accounting Help

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On December 1, 2009, a U.S.-based company entered into a three-month forward contract to purchase 1 million Mexican pesos on March 1, 2010.;The following are the purchase rates for US dollar per peso;Date;Spot Rate;Forward Rate (March, 2010);December 1, 2009;$0.088;$0.084;December 31, 2009;$0.080;$0.074;March 1, 2010;$0.076;The company?s borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803.;How will the U.S. company report the forward contract on its December 31, 2009, balance sheet?

 

Paper#80695 | Written in 18-Jul-2015

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