Question
Hedging a Foreign Currency CommitmentEffects on Income On October 1, 2020, Orchid Foods agreed to sell merchandise to a Swiss customer for 500,000 swiss francs
Hedging a Foreign Currency CommitmentEffects on Income
On October 1, 2020, Orchid Foods agreed to sell merchandise to a Swiss customer for 500,000 swiss francs (CHF). Delivery is to be
made on November 30, 2020, and payment is to be received on January 31, 2021. Concurrently, Orchid
Foods sold CHF500,000 forward for delivery on January 31, 2021, for a total contract price of $513,000.
Orchid Foods closes its books annually on December 31. Current spot rates and forward rates ($/CHF)
for delivery on January 31, 2021, are as follows:
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Payroll Accounting 2018
Authors: Bernard J. Bieg, Judith Toland
28th edition
1337291056, 978-1337291057, 1337291137, 9781337291132, 9781337516686 , 978-1337291040
