Travel Co. ordered parts costing 50,000 Foreign Currency Units (FCU) from a foreign supplier on March 15 when the spot rate was $0.98 per FCU. A one-month forward contract was signed on that date to purchase 100,000 FCU at a forward rate of $0.99 per FCU. On March 31, the forward rate was $1.01. On April 14, when the parts were received and payment was made, the spot rate was $1.03 per FCU. At what amount should inventory be reported? O $50,500 $49,500 $50,000 O $49,000 $51,500
Travel Co. ordered parts costing 50,000 Foreign Currency Units (FCU) from a foreign supplier on March 15 when the spot rate was $0.98 per FCU. A one-month forward contract was signed on that date to purchase 100,000 FCU at a forward rate of $0.99 per FCU. On March 31, the forward rate was $1.01. On April 14, when the parts were received and payment was made, the spot rate was $1.03 per FCU. At what amount should inventory be reported? O $50,500 $49,500 $50,000 O $49,000 $51,500
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 11P
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