Problem #2 (10 points) A U.S. company buys merchandise on a regular basis from u.K. suppliers, with payment to be ma On November 1, 2017, the company takes delivery of merchandise costing 1,000,000 from a payment to be made on March 1, 2018. On November 1, the company enters 1,000,000 on March 1, 2018. On March 1, 2018, the company closes the contract and pays company has a December 31 year-end. U.K. supplier, with a forward contract for delivery of Spot and forward rates (S/E) are as follows: Forward Rate for March 1, 2018 Delivery 1.504 1.488 1.452 Spot Rate November 1, 2017 December 31, 2017 March 1, 2018 $1.500 1.483 1.452 Required Compute the amounts below as they appearing on the U.S.company's financial statements a. Investment in forward contract, December 31, 2017 balance sheet. Indicate whether it is an asset or a liability. b. Gain or loss on forward contract, 2018 income statement. Indicate whether it is a gain or loss. c. Gain or loss on accounts payable, 2018 income statement. Indicate whether it is a gain or loss. CGaun d. Why did the company use the rate you selected