Stucklikechuck1703
06.07.2019 •
Business
Belsen purchased inventory on december 1, 2015. payment of 100,000 stickles was to be made in sixty days. also on december 1, belsen signed a contract to purchase §100,000 in sixty days. the spot rate was §1 = .35714, and the 60-day forward rate was §1 = $.38462. on december 31, the spot rate was §1 = .34483 and the 30-day forward rate was §1 = .38168. assume an annual interest rate of 8% and a fair value hedge. the present value for one month at 8% is .9901.in the journal entry to record the establishment of a forward exchange contract, at what amount should the forward contract account be recorded on december 1? $0, since there is no cost there is no value for the contract at this date.$71,428.$588.$582.none of the above.
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Ответ:
Since sales will be unaffected profit per unit is more in Sale Purchase, therefore, the company shall purchase and then sell as incremental profit = $7 - $4.50 = $2.50
Explanation:
Provided details
In case of manufacturing =
Cost = $9.00
Selling Price = $13.50
Profit per unit = $13.50 - $9 = $4.50
In case of purchase and sale
Cost = $5.00
Selling Price = $12
Profit = $12 - $5 = $7 per unit
Since sales will be unaffected profit per unit is more in Sale Purchase, therefore, the company shall purchase and then sell as incremental profit = $7 - $4.50 = $2.50