Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. shandra corporation (a us. based company) expects

Shandra Corporation (a US. based company) expects to order goods from a foreign supplier at...

60.1K

Verified Solution

Question

Accounting

image
Shandra Corporation (a US. based company) expects to order goods from a foreign supplier at a price of 107,000 pounds, valth delivery and payment to be made on ture 15 , On April 15, when the spot rate is $1.27 per pound, Shandra purchases a two-month call option on 107,000 pounds and designates this option as a cash llow hedge of a forecasted foreign currency transaction. The time value of the option is excluded in assessing hedge effectiveness; the change in time value is recognized in riet income over the ife of the option. The option has a strike price of \$1.27 per pound and costs $1.070. The goods are recelved and pald for on June 15 . Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $1,320 on June 15 . Required: a-1. Prepare all journal entries for Shandra Corporation related to this transaction and hedge: a-2. What amount should Shandra Corporation report in net income as cost of goods sold for the quarter ending June 30 ? b. What amount should Shandra Corporation report in net income as forelgn exchange gain or loss for the quarter ehding June 30 ? Complete this question by entering your answers in the tabs below

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

GEOMETRY Volume of a cylinder A grain silo has a cylindrical shape Its radius is...

Operations Management
1.2K views

Equal Employment Opportunity Exxon employs a number of employees in various companies. If Exxon decided to \"fire”...

Chemistry
1.2K views

Just answers. A. A buffer solution that is 0.431 M in HClO and 0.431 M in NaClO has...

Chemistry
1.2K views

Q1/50 grams of an unknown metal at a temperature of 100 ºC is placed in a...

Basic Math
1.2K views

Krinkles potato chips is having a Lucky Seven Sweepstakes The one grand prize is 50...

Algebra
1.2K views

Let A be the set of integers that are multiples of 3 between 2 and...

Accounting
1.2K views

Two Transaction Approach required by GAAP: Sale/Purchase is separate from Credit decision, and...

Accounting
1.2K views

Budgeted income statement and supporting budgetsThe budget director of Gold Medal Athletic Co.,...

Accounting
1.2K views

all entries are for blue star airlineon May 1, 2022, Bluestar Airlines issues $500,000.04 percent...

Accounting
1.2K views

bonds Bayabie is always recorded at tace value. Any daference in issue price is raflected...

Finance
1.2K views

Find the compound amount for the deposit. Round to the nearest cent. $1,500 at 6%...

Accounting
1.2K views

Which of the following companies would be more likely to use the specific identification inventory...