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On November 1, 2019, Flower Company, a U.S. company, entered into a four-month forward contract to sell 50,000 liras on February 1, 2020. The following U.S. dollar per lira exchange rates apply: Date                             Spot rate          Forward Rate                                                             (to Feb 1st 2020) November 1, 2019       $0.092             $0.105 December 31, 2019     $0.090             $0.095 February 1, 2020         $0.089             N/A
 
 Flower's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent is .9803. Which of the following is included in Flower's December 31, 2019 balance sheet for the forward contract?

On November 1, 2019, Flower Company, a U.S. company, entered into a four-month forward contract to sell 50,000 liras on February 1, 2020. The following U.S. dollar per lira exchange rates apply: Date                             Spot rate          Forward Rate                                                             (to Feb 1st 2020) November 1, 2019       $0.092             $0.105 December 31, 2019     $0.090             $0.095 February 1, 2020         $0.089             N/A
 
 Flower's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent is .9803. Which of the following is included in Flower's December 31, 2019 balance sheet for the forward contract?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On November 1, 2019, Flower Company, a U.S. company, entered into a four-month forward contract to sell 50,000 liras on February 1, 2020.

The following U.S. dollar per lira exchange rates apply:

Date                             Spot rate          Forward Rate

                                                            (to Feb 1st 2020)

November 1, 2019       $0.092             $0.105

December 31, 2019     $0.090             $0.095

February 1, 2020         $0.089             N/A
 


Flower's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent is .9803. Which of the following is included in Flower's December 31, 2019 balance sheet for the forward contract? 

 

 
 
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