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5. At the close of business on December 31, 2015 Booker Corp pays a $30,000 premium to purchase a foreign currency option giving Booker the right but not the obligation to purchase 100,000 euros and sell $140,000 US dollars in six months as a hedge of a future euro rental obligation What is reported on the balance sheet at December 31, 2015 (in US dollars) a. asset of $0 b. asset of $30,000 c. asset of $130,000 d. asset of $140,000 e. asset of $170,000 6. Quick enters into a foreign exchange forward hedge of a foreign currency asset. Which of the following hedges qualifies as a effective fair value hedge for the 3 months ended December 31, 2014. a. Revaluation gain on FC Asset of $10,000; Gain on FC hedge of $9000 b. Revaluation gain on FC Asset of $10,000: Loss on FC hedge of $15,000 c. Revaluation loss on FC Asset of $20,000; Loss on FC hedge of $18,000 d. Revaluation loss on FC Asset of $20,000; Gain on FC hedge of 18,000 e. Revaluation gain on FC Asset of $10,000; No gain or loss on FC hedge I 7. The following represents the inflation rates of foreign country X for the past 4 years: Year 1: 35% Year 2: 20% Year 3: 25% Year 4: 30% Which statement is correct about the selection of a functional currency for country X at the end of year 4, a. Country X is highly inflationary, the US dollar must be used b. Country X is highly inflationary; the foreign currency must be used c. Country X is not highly inflationary; the US dollar must be used 5. At the close of business on December 31, 2015 Booker Corp pays a $30,000 premium to purchase a foreign currency option giving Booker the right but not the obligation to purchase 100,000 euros and sell $140,000 US dollars in six months as a hedge of a future euro rental obligation What is reported on the balance sheet at December 31, 2015 (in US dollars) a. asset of $0 b. asset of $30,000 c. asset of $130,000 d. asset of $140,000 e. asset of $170,000 6. Quick enters into a foreign exchange forward hedge of a foreign currency asset. Which of the following hedges qualifies as a effective fair value hedge for the 3 months ended December 31, 2014. a. Revaluation gain on FC Asset of $10,000; Gain on FC hedge of $9000 b. Revaluation gain on FC Asset of $10,000: Loss on FC hedge of $15,000 c. Revaluation loss on FC Asset of $20,000; Loss on FC hedge of $18,000 d. Revaluation loss on FC Asset of $20,000; Gain on FC hedge of 18,000 e. Revaluation gain on FC Asset of $10,000; No gain or loss on FC hedge I 7. The following represents the inflation rates of foreign country X for the past 4 years: Year 1: 35% Year 2: 20% Year 3: 25% Year 4: 30% Which statement is correct about the selection of a functional currency for country X at the end of year 4, a. Country X is highly inflationary, the US dollar must be used b. Country X is highly inflationary; the foreign currency must be used c. Country X is not highly inflationary; the US dollar must be used