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Q3. (10 points) 2001: A company located in Seattle engaged in the following transactions during 1) On February 1. purchased goods from a French firm

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Q3. (10 points) 2001: A company located in Seattle engaged in the following transactions during 1) On February 1. purchased goods from a French firm at a cost of 200.000 euros. The spot rate for euros on February I was 1 euro - $1.02. On March 1, the company purchased 200,000 euros when the spot rate was 1 euro = $.98 and delivered them to the French firm to settle the payable. 2) On April 16, acquired goods from an Argentinian firm at a cost of 3,000,000 U.S. dollars. The spot rate for Argentinian pesos on April 16 was 1 Argentina peso = .35. On May 16, the Baltimore company delivered 3,000,000 U.S. dollars to the Argentinian firm to settle the payable when the spot rate for Argentina pesos was 1 Argentina peso = $.37. 3) On June 10, sold goods to a firm in Singapore for 3,000,000 Singapore dollars. The spot rate for Singapore dollars on June 10 was 1 Singapore dollar - S.57. On July 10, the Baltimore company received 3,000,000 Singapore dollars from the Singapore firm to settle the receivable. The spot rate on July 10 was 1 Singapore dollar - S.56. 4) On November 1, entered into a 90-day forward exchange contract to speculate in the India rupee. The 90-day forward exchange rate was 1 India rupee - $.02. On December 31, 2008, the forward exchange rate for a 30-day contract was 1 India rupee - $.025. The Baltimore company will deliver 3,000,000 India rupees to the exchange broker on January 30, 2009. 5) On December 1, sold goods to a firm in Britain for 3,000,000 pounds. The spot rate for pounds on December 1 was 1 pound - $1.47. On December 1, the Baltimore company entered into a forward exchange contract to deliver 3,000,000 pounds on January 30, 2009 at the forward exchange rate of 1 pound - $1.46. The spot rate on December 31, 2008, was 1 pound $1.44, and the 30-day forward rate on December 31, 2008 was $1.45. Required: Prepare a schedule showing the effect for each of the above transactions on the income statement of the Seattle company for the year ended December 31, 2008. Show supporting computations in good form. Transaction Income ordless) Computation 1. 2. 3. 4

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