Question
On June 10, 20x6, MALAKAS Co. enters into a couple of forward contracts each for US$10,000, deliverable 60 days.Relevant rates of exchange follow: Spot rate:
On June 10, 20x6, MALAKAS Co. enters into a couple of forward contracts each for US$10,000, deliverable 60 days.Relevant rates of exchange follow:
Spot rate:
June 10, 20x6P26.40/US$
June30, 20x6P29.40/US$
Forward rate:
August 9, 20x6P27.90/US$
Forward contract #1 will hedge on inventory purchases of May, 20x6 which are payable four months later.Forward contract #2 is entered into because of the perceptible increase in the peso-dollar rate as a consequence of the coming Atlanta Olympic games.
On forward contract #2, the foreign exchange gain or loss on June 30, 20x6 is?
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Daniel G Short, George Kanaan, Maureen Sterling
6th Canadian edition
73208140, 1259105695, 978-1259105692
