Johnson Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2022, with payment of 25,000 dinars to be received on March 1, 2023. Johnson enters into a forward contract on December 1, 2022, to sell 25,000 dinars on March 1, 2023. The forward contract is not designated as a hedge. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2022 December 31, 2022 March 1, 2023 O $1,500 O $1,800 $2,400 Spot Rate O $2,000 $2.26 $2.40 $2.55 In its income statement for the year ended December 31, 2023, Johnson should report a foreign currency transaction gain of Forward Rate (to March 1, 2023) $2.30 2.48 The

Johnson Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2022, with payment of 25,000 dinars to be received on March 1, 2023. Johnson enters into a forward contract on December 1, 2022, to sell 25,000 dinars on March 1, 2023. The forward contract is not designated as a hedge. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2022 December 31, 2022 March 1, 2023 O $1,500 O $1,800 $2,400 Spot Rate O $2,000 $2.26 $2.40 $2.55 In its income statement for the year ended December 31, 2023, Johnson should report a foreign currency transaction gain of Forward Rate (to March 1, 2023) $2.30 2.48 The

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Question

Johnson Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2022, with payment of 25,000
dinars to be received on March 1, 2023. Johnson enters into a forward contract on December 1, 2022, to sell 25,000 dinars
on March 1, 2023. The forward contract is not designated as a hedge. Relevant exchange rates for the dinar on various
dates are as follows:
Date
December 1, 2022
December 31, 2022
March 1, 2023
O $1,500
O $1,800
O $2,400
Spot Rate
O $2,000
$2.26
$2.40
$2.55
In its income statement for the year ended December 31, 2023, Johnson should report a foreign currency transaction gain
of
Forward Rate
(to March 1, 2023)
$2.30
2.48

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