See below information from exercise 12-9 JournalEntries-SpeculationUsing a Forward Contract LO 5Use the data given in Exercise 12-9, except assume that on November 1, Sitco Products enteredinto a 90-day forward contract to buy 900,000 Swedish kronas on January 30 for $.5085per krona.Required:Prepare all necessary journal entries in regard to the forward contract. Using a Forward Contract LO 5Journal Entries-SpeculationSharon Myers, chief finance officer for Sitco Products, convinced the president of the companyto enter into a 90-day forward contract to sell 900,000 Swedish kronas as a speculative venture.When the forward contract was acquired on November 1, 2019, the spot rate for the krona was$.5045 and the 90-day future rate was $.5085. At December 31, 2019, the end of the firm's fiscalyear, the spot rate was $.4981 and the future rate for kronas to be sold on January 30, 2020, was$.4996. On January 30, 2020, the spot rate was $.4826.Required:Prepare all necessary journal entries in regard to the forward contract.

Speculation Forward Contract: The contract which pursue the counterparties to buy or sell an assets…

Using Use the data given in Exercise 12-9, except assume that on November 1, Sitco Products entered into a 90-day forward contract to buy 900,000 Swedish kronas on January 30 for $.5085 per krona. Required: Prepare all necessary journal entries in regard to the forward contract.

Using Use the data given in Exercise 12-9, except assume that on November 1, Sitco Products entered into a 90-day forward contract to buy 900,000 Swedish kronas on January 30 for $.5085 per krona. Required: Prepare all necessary journal entries in regard to the forward contract.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

See below information from exercise 12-9

Journal
Entries-Speculation
Using a Forward Contract LO 5
Use the data given in Exercise 12-9, except assume that on November 1, Sitco Products entered
into a 90-day forward contract to buy 900,000 Swedish kronas on January 30 for $.5085
per krona.
Required:
Prepare all necessary journal entries in regard to the forward contract.

Using a Forward Contract LO 5
Journal Entries-Speculation
Sharon Myers, chief finance officer for Sitco Products, convinced the president of the company
to enter into a 90-day forward contract to sell 900,000 Swedish kronas as a speculative venture.
When the forward contract was acquired on November 1, 2019, the spot rate for the krona was
$.5045 and the 90-day future rate was $.5085. At December 31, 2019, the end of the firm's fiscal
year, the spot rate was $.4981 and the future rate for kronas to be sold on January 30, 2020, was
$.4996. On January 30, 2020, the spot rate was $.4826.
Required:
Prepare all necessary journal entries in regard to the forward contract.

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