On November 2, 201*, Sade entered into firm commitment with Singaporean firm to acquire an equipment, delivery and passage of title on February 28, 201* at a price of 5,000 Singapore Dollar (SGD). On the same date, to hedge against unfavorable changes in exchange rate of SGD, Sade entered into a 120-day forward contract with Andy Bank for 5,000 SGD. The relevant exchange rates were as follows: 11/2/201*12/31/201* 02/28/201* Spot Rate 34 36 37 Forward Rate 35 38 37 How much is the recognized derivative liability as of December 31, 201* as a result of the above transactions?

On November 2, 201, Sade entered into firm commitment with Singaporean firm to acquire an equipment, delivery and passage of title on February 28, 201 at a price of 5,000 Singapore Dollar (SGD). On the same date, to hedge against unfavorable changes in exchange rate of SGD, Sade entered into a 120-day forward contract with Andy Bank for 5,000 SGD. The relevant exchange rates were as follows: 11/2/20112/31/201 02/28/201* Spot Rate 34 36 37 Forward Rate 35 38 37 How much is the recognized derivative liability as of December 31, 201* as a result of the above transactions?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 21E

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