Question
On 10/17/2017, A U.S. company (which has a 12/31 year-end) took delivery from a Canadian firm of inventory costing C$500,000. Payment is due in 90
On 10/17/2017, A U.S. company (which has a 12/31 year-end) took delivery from a Canadian firm of inventory costing C$500,000. Payment is due in 90 days. Concurrently the company entered into a forward contract to buy C$500,000 in 90 days at 1 CS $1.05. Direct exchange rates for CS on the respective dates are as follows:
Required:
Prepare all entries related to this transaction, assuming that the payment was made on 1/15/2018
Forward Rate Date Spot Rate (Delivery on 1/15/2018) 10/17/2017 1.04 1.05 12/31/2017 1.08 1.07 1/15/2018 1.01
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Fundamentals of Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
6th edition
0-07-786223-6, 101259095592, 13: 978-0-07-7, 13978125909559, 978-0077862237
