12. On October 1, Boeing received an order from British Airways for a 747 for $200,000,000 to be paid on December 1. The exchange rates for $1 U.S. are as follows: Exchange Rates of $1 for British Pounds Spot rate, October 1 Spot rate, December 1 Forward rate, December 1 £.70 £.68 £.71 Required: If British Airways decided to hedge $150,000,000 and self insure the balance, what gain or loss would the company record on its books for the purchase of the 747? 13. On June 1, Dow Chemical purchased goods costing $140,000 from Mitsubishi in Japan. Payment for the goods is due August 1. The exchange rates for $1 U.S. are as follows: Exchange Rates of $1 for Yen Spot rate, June 1 Forward rate, August 1 Spot rate, August 1 ¥104 ¥102 ¥101 Required: If Mitsubishi decided to hedge $100,000 and self insure the balance, what gain or loss would the company record on its books for the sale to Dow Chemical?

12. On October 1, Boeing received an order from British Airways for a 747 for $200,000,000 to be paid on December 1. The exchange rates for $1 U.S. are as follows: Exchange Rates of $1 for British Pounds Spot rate, October 1 Spot rate, December 1 Forward rate, December 1 £.70 £.68 £.71 Required: If British Airways decided to hedge $150,000,000 and self insure the balance, what gain or loss would the company record on its books for the purchase of the 747? 13. On June 1, Dow Chemical purchased goods costing $140,000 from Mitsubishi in Japan. Payment for the goods is due August 1. The exchange rates for $1 U.S. are as follows: Exchange Rates of $1 for Yen Spot rate, June 1 Forward rate, August 1 Spot rate, August 1 ¥104 ¥102 ¥101 Required: If Mitsubishi decided to hedge $100,000 and self insure the balance, what gain or loss would the company record on its books for the sale to Dow Chemical?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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