international Accounting

Saved He On September 1, Year 1, Keefer Company received an order to sell a machine to a customer in Canada at 100.000 Canadian dollars. The machine was shipped and payment was received on March 1. Year 2 On Year 1. Keefer Company purchased a put option giving it the right to sell 100,000 Canadian dollars on Ma a price of $75,000. Keefer Company properly designates the option as a fair value hedge of the Canadia commitment. The option cost $1,700 and had a fair value of $2,800 on December 31, Year 1. The fair value commitment is measured through reference to changes in the spot rate. The following spot exchange rate Date September 1, Year 1 December 31, Year 1 March 1, Year 2 U.S. Dollar per Canadian Dollar $0.75 0.73 0.71 Keefer Company's incremental borrowing rate is 12 percent. The present value factor for two months at an Interest rate of 12 percent (1 percent per month) is 0.9803 what was the net impact on Keefer Company's Year income as a result of this fair value hedge of a fimco S Prev 7 10 Next