Question
13.On June 1, Dow Chemical purchased goods costing $140,000 from Mitsubishi in Japan.Payment for the goods is due August 1.The exchange rates for $1 U.S.
13.On June 1, Dow Chemical purchased goods costing $140,000 from Mitsubishi in Japan.Payment for the goods is due August 1.The exchange rates for $1 U.S. are as follows:
Exchange Rates(of $1 for Yen)
Spot rate, June 1 104
Forward rate, August 1102
Spot rate, August 1 101
Required:
If Mitsubishi decided to hedge $100,000 andself insurethe balance, whatgainor loss would the company record on its books for the sale to Dow Chemical?
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Accounting for Decision Making and Control
Authors: Jerold Zimmerman
8th edition
78025745, 978-0078025747
