Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. u tion por tic ingatiwu questions matthew corporat

U TION POR TIC INGATIWU QUESTIONS Matthew Corporation entered into a forward exchange contract (FEC)...

80.2K

Verified Solution

Question

Accounting

image

U TION POR TIC INGATIWU QUESTIONS Matthew Corporation entered into a forward exchange contract (FEC) to purchase 10,000 foreign currency units (FCU) in 90 days. The FEC was dated November 1, 2019. and the purchase is to be made on January 30, 2020. Exchange rates are given below: Forward Rate Forward Rate Spot Rate 30-Day 90-Day November 1, 2019 $0.80 NA $0.77 December 31, 2019 $0.83 $0.82 NA 9. Assume that Matthew's Treasurer felt that the company's earnings would increase for the next quarter if he purchased a FEC. In Matthew's income statement for the year ended December 31, 2019, what amount of gain or loss should be reported from this FEC? 10. Instead of the motive of the treasurer given above, the FEC was entered into as a cash flow hedge (ie, to hedge a forecasted transaction). In Matthew's income statement for the year ended December 31, 2019, what amount of gain or loss should be reported from this FEC

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