How does a company determine the fair value of a foreign currency forward contract? How does...
- How does a company determine the fair value of a foreign currency forward contract? How does it determine the fair value of an option?
- How are changes in the fair value of an option accounted for in a cash flow hedge? In a fair value hedge?
- When a measurement rather than translation is appropriate? How does translation differ from measurement?
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How does a company determine the fair value of a foreign
currency forward contract? How does...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and
spirits, placed an order with a French supplier for 2,200 cases of
wine at a price of 260 euros per case. The total purchase price is
572,000 euros. Relevant exchange rates for the euro are as
follows:
Date
Spot Rate
Forward Rate
to October 31
Call Option Premium
for October 31
(strike price $1.65)
September 15
$
1.65
$
1.71
$
0.035
September 30
1.70
1.74
0.070
October 31
1.75
1.75...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date September 15 September 30 October 31 Spot Rate $1.15 1.20 1.25 Forward Rate to October 31 $1.21 1.24 1.25 Call Option Premium for October 31 (strike price $1.15) $ 0.050 0.085 0.100 Vino...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date Spot Rate Forward Rate to October 31 Call Option Premium for October 31 (strike price $1.15) September 15 $ 1.15 $ 1.21 $ 0.050 September 30 1.20 1.24 0.085 October 31 1.25 1.25...
Zorba Company Zorba Company, a U.S.-based importer of specialty olive oil, placed an order wit a...
Zorba Company Zorba Company, a U.S.-based importer of specialty olive oil, placed an order wit a foreign supplier for 500 cases of olive oil at a price of 100 crowns per case. Th total purchase price is 50,000 crowns. Relevant exchange rates are as follows: Spot Rate Forward Rate (to January 31, Year 2) Call Option Premium for January 31, Year 2 (strike price $1.00) Date December 1, Year 1..... December 31, Year 1.... January 31, Year 2...... $1.00 1.10...
Describe the accounting for changes unfair value of derivative instruments in following situations: 1) fair value h...
Describe the accounting for changes unfair value of derivative instruments in following situations: 1) fair value hedge, 2) cash flow hedge,3) foreign currency hedge and 4) not designated as a hedge
Describe the accounting for changes unfair value of derivative instruments in following situations: 1) fair value hedge, 2) cash flow hedge,3) foreign currency hedge and 4) not designated as a hedge
how do you find foward contract and gain on forward contract? confused cant figure it out...
how do you find foward contract and gain on forward contract?
confused cant figure it out for 9/30. also how would you figure it
out on 10/31? can you please show work. thanks
Date September 15 September 30 October 31 Spot Rate $ 1.25 1.30 1.35 Forward Rate to October 31 $ 1.31 1.34 1.35 Call Option Premium for October 31 (strike price $1.25) $ 0.040 0.075 0.100 Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an...
Record purchase of foreign currency option as an asset. Record entry for order placed with foreign...
Record purchase of foreign currency option as an asset.
Record entry for order placed with foreign supplier.
Record the entry to recognize the increase in the value of the
foreign currency option.
Record entry to recognize the decrease in the time value of the
option as an expense.
Record the entry to recognize the increase in the value of the
foreign currency option.
Record gain or loss on the foreign currency option.
Record the sale.
Record the receipt of marks....
Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020,...
Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 27,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 27,000 dinars on March 1, 2021.Relevant exchange rates for the dinar on various dates are as follows: DateSpot RateForward Rate(to March 1, 2021)December 1, 2020$4.50$4.575December...
CASE THREE, ALEXANDER Inc. Sometimes in November Year 1 (Y1), Alexander Inc., a US based importer...
CASE THREE, ALEXANDER Inc. Sometimes in November Year 1 (Y1), Alexander Inc., a US based importer of olive oil placed an order for 500 cases of olive oil at a price of 100 Euros per case. The pertinent exchange rates are given below. DATE SPOT FORWAR RATE CALL OPTION PREMIUM FOR RATE (to January 31, Y2) 1/31/Y2 (Strike price of $1) 12/1/Y1 $1.00 $1.08 $0.04 12/31/Y1 $1.12 $1.20 $0.12 1/31/Y2 $1.15 $1.15 ...
1. Record the sales and foreign currency accounts receivable. 2. Record the forward contract. 3. Record the entry for changes in the exchange rate. 4. Record the change in the fair value of the forwa...
1. Record the sales and foreign currency accounts
receivable.
2. Record the forward contract.
3. Record the entry for changes in the exchange rate.
4. Record the change in the fair value of the forward
contract.
5. Record the gain or loss on the forward contract.
6. Record the allocation of the premium or discount.
7. Record the entry for changes in the exchange rate.
8. Record the entry to adjust the carrying value of the forward
contract to its...
Vino Veritas Company, a U.S.-based importer of wines and
spirits, placed an order with a French supplier for 2,200 cases of
wine at a price of 260 euros per case. The total purchase price is
572,000 euros. Relevant exchange rates for the euro are as
follows:
Date
Spot Rate
Forward Rate
to October 31
Call Option Premium
for October 31
(strike price $1.65)
September 15
$
1.65
$
1.71
$
0.035
September 30
1.70
1.74
0.070
October 31
1.75
1.75...
Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,200 cases of wine at a price of 230 euros per case. The total purchase price is 276,000 euros. Relevant exchange rates for the euro are as follows: Date September 15 September 30 October 31 Spot Rate $1.15 1.20 1.25 Forward Rate to October 31 $1.21 1.24 1.25 Call Option Premium for October 31 (strike price $1.15) $ 0.050 0.085 0.100 Vino...
Zorba Company Zorba Company, a U.S.-based importer of specialty olive oil, placed an order wit a foreign supplier for 500 cases of olive oil at a price of 100 crowns per case. Th total purchase price is 50,000 crowns. Relevant exchange rates are as follows: Spot Rate Forward Rate (to January 31, Year 2) Call Option Premium for January 31, Year 2 (strike price $1.00) Date December 1, Year 1..... December 31, Year 1.... January 31, Year 2...... $1.00 1.10...
Describe the accounting for changes unfair value of derivative instruments in following situations: 1) fair value hedge, 2) cash flow hedge,3) foreign currency hedge and 4) not designated as a hedge
Describe the accounting for changes unfair value of derivative instruments in following situations: 1) fair value hedge, 2) cash flow hedge,3) foreign currency hedge and 4) not designated as a hedge
how do you find foward contract and gain on forward contract?
confused cant figure it out for 9/30. also how would you figure it
out on 10/31? can you please show work. thanks
Date September 15 September 30 October 31 Spot Rate $ 1.25 1.30 1.35 Forward Rate to October 31 $ 1.31 1.34 1.35 Call Option Premium for October 31 (strike price $1.25) $ 0.040 0.075 0.100 Vino Veritas Company, a U.S.-based importer of wines and spirits, placed an...
Record purchase of foreign currency option as an asset.
Record entry for order placed with foreign supplier.
Record the entry to recognize the increase in the value of the
foreign currency option.
Record entry to recognize the decrease in the time value of the
option as an expense.
Record the entry to recognize the increase in the value of the
foreign currency option.
Record gain or loss on the foreign currency option.
Record the sale.
Record the receipt of marks....
1. Record the sales and foreign currency accounts
receivable.
2. Record the forward contract.
3. Record the entry for changes in the exchange rate.
4. Record the change in the fair value of the forward
contract.
5. Record the gain or loss on the forward contract.
6. Record the allocation of the premium or discount.
7. Record the entry for changes in the exchange rate.
8. Record the entry to adjust the carrying value of the forward
contract to its...
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