Hedging Foreign Exchange Kisk On November 1, 2022, Ambrose Co. purchased inventory from a customer for 120,000 FCUS with payment to be received on April 30, 2023. At the date of sale, Ambrose entered into a forward exchange contract wherein 120,000 FCUS would be received from a currency broker in six months. The six month forward exchange rate on that date was 1 FCU = $0.52. The spot rates and forward rates on various dates were as follows: Date Spot Rate November 1, 2022| $0.53= 1 FCU $0.50 = 1 FCU December 31, 2022 April 30, 2023 $0.49 = 1 FCU | N/A REQUIRED: Prepare journal entries for this transaction and forward contract. Forward Rate (4/30/2023) $0.52 = 1 FCU $0.48=1 FCU

Hedging Foreign Exchange Kisk On November 1, 2022, Ambrose Co. purchased inventory from a customer for 120,000 FCUS with payment to be received on April 30, 2023. At the date of sale, Ambrose entered into a forward exchange contract wherein 120,000 FCUS would be received from a currency broker in six months. The six month forward exchange rate on that date was 1 FCU = $0.52. The spot rates and forward rates on various dates were as follows: Date Spot Rate November 1, 2022| $0.53= 1 FCU $0.50 = 1 FCU December 31, 2022 April 30, 2023 $0.49 = 1 FCU | N/A REQUIRED: Prepare journal entries for this transaction and forward contract. Forward Rate (4/30/2023) $0.52 = 1 FCU $0.48=1 FCU

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 22E

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