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On June 1, CamCo received a signed agreement to sell inventory for ¥500,000. The sale would...

On June 1, CamCo received a signed agreement to sell inventory for ¥500,000. The sale would take place in 90 days. CamCo immediately signed a 90-day forward contract to sell the yen as soon as they are received. The spot rate on June 1 was ¥1 =$.004167, and the 90-day forward rate was ¥1 = $.00427. At what amount would CamCo record the Forward Contract on June 1?

Multiple Choice

$2,135.

$2,110.

$0.

$2,083.

$2,532.

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Answer #1

Option C is the answer

($0)

Forward contract is not recorded at the date of sale. So $0 is the answer

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