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Need ASAP Please 30 minutes On November 1, 2020, AmeriCo, a U.S. company with fiscal year-end on December 31, purchased inventory from a company in
Need ASAP Please 30 minutes
On November 1, 2020, AmeriCo, a U.S. company with fiscal year-end on December 31, purchased inventory from a company in Spain for 30,000 euro () with payment due on February 1, 2021. The following foreign exchange rates are available: Spot Rate Forward Rate for 2/1/2021 Delivery November 1, 2020 $1.61 $1.59 December 31, 2020 $1.65 $1.62 February 1, 2021 $1.60 On March 4, 2021, AmeriCo sold all the inventory bought from the Spain supplier for U.S. $70,000. Assume that, on November 1, 2020, AmeriCo entered into a 90-day forward contract to purchase 30,000 on February 1, 2021 and designated this forward as a fair value hedge, how much is the amount of gross profit to be reported in AmreiCo's 2021 income statement? A. $21,100 B. $21,700 C. $22,000 D. $22,300Step by Step Solution
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