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

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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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?
$50,500
O $49,500
$50,000
$49,000
$51,500
Transcribed Image Text: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? $50,500 O $49,500 $50,000 $49,000 $51,500
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