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Need Fast in an hour please On November 1, 2020, AmeriCo, a U.S. company with fiscal year-end on December 31, purchased Inventory from a company
Need Fast in an hour please
On November 1, 2020, AmeriCo, a U.S. company with fiscal year-end on December 31, purchased Inventory from a company in Spain for 50,000 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. $100,000. Assume that, on November 2, 2020, AmeriCo entered into a 90-day forward contract to purchase 50,000. If this forward contract is not designated as a hedge, but is entered into to manage the company's foreign currency-exposed accounts payable, AmeriCo should report this forward contract on its balance sheet dated December 31, 2020 as: A. a liability with the amount of $81,000. B. an asset with the amount of $1,500. C. a liability with the amount of $1,500. D. an asset with the amount of $81,000Step by Step Solution
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