A U.S. company anticipates that it will sell merchandise for €100,000 at the end of August and receive payment for it at the end of October. On May 1, when the spot rate is $1.20 and the forward rate for delivery on October 31 is $1.21, the company enters a forward contract to sell €100,000 on October 31. The forward contract qualifies as a cash flow hedge of the forecasted sale. The company sells the merchandise on August 30, when the spot rate is $1.232 and the forward rate for October 31 delivery is $1.23 and receives payment of €100,000 and closes the forward contract on October 31, when the spot rate is $1.24. The company has a December 31 year-end. Sales revenue is reported on the company's income statement in the amount of:
Q: What is the NPV of project B? Which project should comfy home choose?
A: Here's a detailed calculation for better understanding. The detailed NPV calculation for Project B…
Q: Domestic
A: Journal Entries for Kiona Company's Petty Cash FundMay 1 - Establish the FundPetty Cash ($350.00)…
Q: Brixton Textiles is considering the replacement of some of its manufacturing equipment. Information…
A: The objective of the question is to determine whether Brixton Textiles should replace its existing…
Q: None
A: Now, let's examine the calculation of the incremental internal rate of return (IRR) for projects X…
Q: please answer in text form and in proper format answer with must explanation , calculation for each…
A: Sure! As requested, here is the vertical analysis of the balance sheet data for 2025 and 2024.Item…
Q: The University of Cincinnati Center for Business Analytics is an outreach center that collaborates…
A: Certainly, let's break down the spreadsheet model in even greater detail:Member Costs (Rows…
Q: Please correct only the highlighted in red fields. Those are the only numbers I need which are…
A: Detailed calcualtion and explanation:Book value of bonds payable Jan 1, 2025265000280,000 face value…
Q: Grey's Medical operates three support departments and two operating units, Surgery and ER. The…
A: Let's break down the process of allocating costs to the Surgery department from the supporting…
Q: Hanshaben
A: Ornamental Insulation Corporation - Investment Activity Journal Entries (2024)1. Journal Entries:Mar…
Q: 5 Exercise 9-6 (Static) Working with More Than One Cost Driver [LO9-2, LO9-3, LO9-5, LO9-6] 10…
A: The objective of the question is to prepare a flexible budget performance report for the Gourmand…
Q: 6. Which of the following is postponed for emerging growth companies? O a. Internal revenue filings…
A: The question is about the rules and exceptions that apply to new businesses that are growing…
Q: Presented here are the financial statements of Sheffield Company. Sheffield Company Comparative…
A: Approach to solving the question: Detailed explanation: Examples: Key references: Financial…
Q: a4
A: Part 2: Explanation:Step 1: Calculate the cash flows for the upgrade option.- Initial investment:…
Q: 21). April 1, 2018, LLM Shop purchased a machine asset costing $2,000,000 with a salvage value of…
A: The objective of the question is to calculate the depreciation entries for the years 2018, 2019,…
Q: Meman
A: Part 2: ExplanationStep 1: Determine the value of the giftJones wants to gift $4.60 million of…
Q: The Fed conducts an open market operation and increase a bank's excess reserves by $7,000. Explain…
A: Round 1: Bank earns $7,000 for extra reserves. The bank must hold $1,400 ($7,000 * 20%) as reserves…
Q: The following obtained from the Promises' records: Cost Retail Inventory, beginning 1,500,750…
A: The retail inventory method is a useful way to determine the value of inventory. Under this method,…
Q: Blossom Company sells office equipment on July 31, 2022, for $20,100 cash. The office equipment…
A: We need to update the accumulated depreciation as of the date of sale: Given are: Depreciation for…
Q: Vishnu
A: The objective of this question is to calculate the payback period and unadjusted rate of return for…
Q: The capital of SA PSB is made up of 10,000 shares with a par value of €20 fully paid upon 31/12/N. A…
A: A dividend is a distribution of a portion of a company's earnings, decided and distributed by the…
Q: 1)Assume Joe Harry sells his 25 percent interest in Joe's S Corporation, to Tyrone on January 29.…
A: 1. To solve the problem, remember that special identification allocation methods is an allocation in…
Q: Don't give solution in image format..
A: Overhead Variances for Manuel Company:1. Overhead Volume Variance:Formula:Overhead Volume Variance =…
Q: Vinubhai
A: The objective of the question is to calculate the net present value (NPV) of the investment and…
Q: Suppose that Canton Co. is a U.S.-based MNC with a foreign subsidiary in Germany, which deals in…
A: Step 1: Formula: Translated US $ earnings = Earning in Euros * Average Exchange rate for year…
Q: On January 1, 2021, Comfy Home enters into a 3-year operating gives Comfy Home the right to occupy…
A: In order to determine the lease obligations and associated assets of Comfy Home, we apply a…
Q: None
A: The corridor approach is a method used in pension accounting to determine the amount of net gain or…
Q: Please do not give solution in image format thanku
A: Understanding the ScenarioWehner Company manufactures plastic items, including plastic housings for…
Q: A machine costing $214,000 with a four-year life and an estimated $18,000 salvage value is installed…
A: If per unit depreciation is not rounded off to 2 decimal places. Note: If you have any…
Q: Labor quantity variance cut off at bottom. Please anwser question in full
A: (a) Total labor variance:Subtract the actual labor cost from the standard labor cost to get the…
Q: Exercise 2-13 (Algo) Departmental Predetermined Overhead Rates [LO2-1, LO2-2, LO2-4] White Company…
A: The objective of the question is to calculate the predetermined overhead rate for each department,…
Q: None
A: Step by step calculation for each type:Marilyn:Unit Cost: $130Unit Net Realizable Value: $127Lower…
Q: What is the forecasted furniture and fixtures on comfy homes 2018 pro forma financial statements.…
A: Here's a detailed calculation for better understanding. Cost of Furniture and Fixtures: The original…
Q: None
A: After-Tax Income for Manny: December vs. January BillSince Manny uses the cash method of accounting,…
Q: Sagar
A: The objective of the question is to calculate the applied overhead for Byrd for the year. Overhead…
Q: Dineshbhai
A: For the year 2024:Gross Profit Ratio = (Gross Profit / Net Sales) * 100 = (1,114,000 / 3,071,000) *…
Q: Exercise 2-2 (Algo) Apply Overhead Cost to Jobs [LO2-2] Luthan Company uses a plantwide…
A: The objective of the question is to calculate the amount of manufacturing overhead cost that would…
Q: ABC Company has a cash balance of $42,000 on August 1 and requires a minimum ending cash balance of…
A: The objective of this question is to prepare a cash budget for ABC Company for the month of August.…
Q: Please do not give solution in image format thanku
A: Step 1: Compute the cost of goods sold under FIFO methodAn inventory system known as first in, first…
Q: Evaluating Bank performance -Problem Two Given the following information for MSH bank, knowing that…
A: Return on asset The return on assets is the rate at which the company earns the income for the total…
Q: 5 pints eBook Print Zuo Software categorizes its accounts receivable into four age groups for…
A: The objective of the question is to estimate the appropriate balance for Zuo's allowance for…
Q: None
A: Problem a: Straight Line MethodFirst, we compute the amount of premium or discount. Simply get the…
Q: Hardev
A: To compute the applied overhead for Byrd Company for the year, we need to follow these steps based…
Q: Unit 6 - Chapter 9 Assignment i 13 Part 13 of 15 10 points Required information Saved [The following…
A: Spending Variance Related to AdvertisingCalculation:Budgeted Advertising Expense: Planned production…
Q: When a taxpayer has not paid a tax assessment, the IRS can:
A: The objective of this question is to understand the actions that the Internal Revenue Service (IRS)…
Q: Evaluating Bank performance -Problem Two Given the following information for MSH bank, knowing that…
A: Interest revenues are the main source of income for the banks. The bank accepts deposits form the…
Q: None
A: Approach to solving the question: For better clarity of the solution, I have provided the…
Q: a3
A: Paradise Hills Berry Farm has 20 employees who are pald biweekly. The payroll register showed the…
Q: es Prepare a budgeted balance sheet at March 31 using the following information from Zimmer Company.…
A: Preparation of budgeted Balance sheet ZIMMER COMPANYBudgeted Balance Sheet As of March…
Q: Ashvinn
A: Approach to solving the question: Detailed explanation: Examples: Key references: Financial…
Q: None
A: Show draftsRequired A: FICA Social Security Taxes per EmployeeEmployee Cumulative Pay FICA Social…
Please help me to solve this problem
Step by step
Solved in 3 steps with 1 images
- On November 1, 2020, Cheng Company (a U.S.-based company) forecasts the purchase of goods from a foreign supplier for 100,000 yuan. Cheng expects to receive the goods on April 30, 2021, and make immediate payment. On November 1, 2020, Cheng enters into a six-month forward contract to buy 100,000 yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis over the life of the contract. The following U.S. dollar–Yuan exchange rates apply: Date Spot Rate Forward Rate(to April 30, 2021) November 1, 2020 $ 0.21 $ 0.195 December 31, 2020 0.19 0.170 April 30, 2021 0.18 N/A As expected, Cheng receives goods from the foreign supplier on April 30, 2021, and pays 100,000 yuan immediately. Cheng sells the imported goods in the local market in May 2021.…On November 1, 2023, Cheng Company (a U.S.-based company) forecasts the purchase of goods from a foreign supplier for 310,000 yuan. Cheng expects to receive the goods on April 30, 2024, and make immediate payment. On November 1, 2023, Cheng enters a six-month forward contract to buy 310,000 yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points excluded in assessing hedge effectiveness and amortized to net income using a straight-line method on a monthly basis over the life of the contract. The following U.S. dollar–Yuan exchange rates apply: Date Spot Rate Forward Rate (to April 30, 2024) November 1, 2023 $ 0.42 $ 0.405 December 31, 2023 0.41 0.380 April 30, 2024 0.39 N/A As expected, Cheng receives goods from the foreign supplier on April 30, 2024, and pays 310,000 yuan immediately. Cheng sells the imported goods in the local market in May 2024. Required: Prepare all journal entries,…Shandra Corporation (a U.S. -based company) expects to order goods from a foreign supplier at a price of 117,000 pounds, with delivery and payment to be made on June 15. On April 15, when the spot rate is $1.31 per pound, Shandra purchases a two-month call option on 117,000 pounds and designates this option as a cash flow 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 net income over the life of the option. The option has a strike price of $1.31 per pound and costs $1, 170. The goods are received and paid for on June 15. Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $1.360 on June 15. 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 (a U.S.-based company) expects to order goods from a foreign supplier at a price of 107,000 pounds, with delivery and payment to be made on June 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 flow 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 net income over the life of the option. The option has a strike price of $1.27 per pound and costs $1,070. The goods are received and paid 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…Shandra Corporation (a U.S.-based company) expects to order goods from a foreign supplier at a price of 119,000 pounds, with delivery and payment to be made on June 15. On April 15, when the spot rate is $1.46 per pound, Shandra purchases a two-month call option on 119,000 pounds and designates this option as a cash flow 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 net income over the life of the option. The option has a strike price of $1.46 per pound and costs $1,190. The goods are received and paid for on June 15. Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $1.510 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…Shandra Corporation (a U.S.-based company) expects to order goods from a foreign supplier at a price of 121,000 pounds, with delivery and payment to be made on April 20. On February 20, when the spot rate is $1.41 per pound, Shandra purchases a two-month call option on 121,000 pounds and designates this option as a cash flow 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 net income over the life of the option. The option has a strike price of $1.41 per pound and costs $1,210. The goods are received and paid for on April 20. Shandra sells the imported goods in the local market by May 31. The spot rate for pounds is $1.46 on April 20. What amount will Shandra Corporation report as foreign exchange gain or loss in net income for the quarter ended June 30?
- Pink has just sold equipment to Black. Pink is a US company who has USD accounting. Sale date is March 2020 and payment date is September 2020. Deal amount €2 000 000 Spot March = $1.20/€ 6-month forward contract = $1.14€ Spot September forecast = $1.16/€ Eurozone 6-month borrowing rate = 2.0%/year If Pink hedges 50% of the exposure with forward contracts, then foreign exchange gains/(losses) are _________On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 180,000 FCUS with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 180,000 FCUS. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Forward Rate Spot Rate $0.29 Date (to April 30, 2018) $ 0.28 November 1, 2017 December 31, 2017 April 30, 2018 0.27 0.25 0.26 N/A Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610. a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract. b. What is the impact on net income in 2017? C. What is the impact on net income in 2018? Complete this question by entering your answers in the tabs below. Req A Req B and C Prepare all…On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 100,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 100,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply: Date Spot rate Forward rate (to April 30, 2018) November 1, 2017 $0.21 $0.20 December 31, 2017 0.19 0.17 April 30, 2018 0.18 N/A Bernard’s incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610.a. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract.b. What is the impact on net income in 2017?c. What is the impact on net income in 2018?
- Use the following information on the U.S. dollar value of the euro to answer the question. Forward Rate for Spot Rate April 30, 2024 Delivery $1.130 $1,140 October 20, 2023 November 1, 2023 December 31, 2023 April 30, 2024 Select one: 1.148 1.100 1.170 On October 30, 2023, a US company receives a purchase order from a customer in Spain. Under the sale terms, the customer will pay the company €100.000 on April 30; 2024 On October 30, the US company also enters a forward contract to sell €100,000 on April 30, 2024. The company delivers the merchandise to the customer on November 1, On April 30, the company receives €100,000 from the customer and sells it using the forward contract. The company's accounting year ends December 31. What net gain or loss is recognized in 2023, in addition to sales revenue? esc a $500 net loss b. 1800 net gain, c. $800 net loss d. $500 net gain 3.145 1165 1.170 * 8: MacBook Air & FL 40 # 6-41 16 W 19 F M mOn November 1, 2017, Dos Santos Company forecasts the purchase of raw materials from a Brazilian supplier on February 1, 2018, at a price of 200,000 Brazilian reals. On November 1, 2017, Dos Santos pays $1,500 for a three-month call option on 200,000 reals with a strike price of $0.40 per real. Dos Santos properly designates the option as a cash flow hedge of a forecasted foreign currency transaction. On December 31, 2017, the option has a fair value of $1,100. The following spot exchange rates apply: Date U.S. Dollar per Brazilian real November 1, 2017 $0.40 December 31, 2017 0.38 February 1, 2018 0.41 What is the net impact on Dos Santos Company’s 2018 net income as a result of this hedge of a forecasted foreign currency transaction? Assume that the raw materials are consumed and become a part of the cost of goods sold in 2018. Choose the correct.a. $80,000 decrease in net income.b. $80,600 decrease in net income.c. $81,100 decrease in net income.d. $83,100 decrease in…On November 1, 2017, Dos Santos Company forecasts the purchase of raw materials from a Brazilian supplier on February 1, 2018, at a price of 200,000 Brazilian reals. On November 1, 2017, Dos Santos pays $1,500 for a three-month call option on 200,000 reals with a strike price of $0.40 per real. Dos Santos properly designates the option as a cash flow hedge of a forecasted foreign currency transaction. On December 31, 2017, the option has a fair value of $1,100. The following spot exchange rates apply: Date U.S. Dollar per Brazilian real November 1, 2017 $0.40 December 31, 2017 0.38 February 1, 2018 0.41 What is the net impact on Dos Santos Company’s 2017 net income as a result of this hedge of a forecasted foreign currency transaction? Choose the correct.a. $–0–.b. $400 decrease in net income.c. $1,000 decrease in net income.d. $1,400 decrease in net income.