Reference no: EM132609256
Richard Smith Ltd is an Australian retailer that sells a wide range of consumer electronic goods through a network of retail shops and online. Recently, one of the company's directors, Karen Brown, expressed interest in the company making use of forward contracts. Because Karen does not know much about forward contracts, she has requested the company's Chief Accountant, Elizabeth Wright, to provide her with some basic information. Elizabeth Wright has requested that you draft a memorandum to Karen Brown for her signature.
Required
Draft a memorandum addressed to Karen Brown for Elizabeth Wright to sign that explains forward contracts. An example of the memorandum format is included at the end of this assignment. Your memorandum should address the following topics:
Question 1: Briefly explain what a forward contract is and how forward contracts differ from options and futures.
Question 2: What are the two types of forward contract? Under what circumstances would a profit or loss be made on a forward contract?
Question 3: Explain how forward contracts (including forward contracts for shares) can be settled.
Question 4: Explain how forward contracts would be classified under AASB 9 Financial Instruments? What are the recognition and derecognition criteria for forward contracts?
Question 5: Explain the measurement requirements (on initial recognition and subsequent to initial recognition) for forward contracts in AASB 9 Financial Instruments.
|
What is net cash flow from financing activities
: Purchased New kitchen equipment for $45,000. Old kitchen equipment was sold for $2,000. What is net cash flow from financing activities
|
|
What amount should be credited to the revaluation reserve
: BI owns a building which it uses as office, What amount should be credited to the revaluation reserve on 30 September 20X4 for the revaluation of the building?
|
|
What is net cash flow from investing activities
: Purchased New kitchen equipment for $45,000. Old kitchen equipment was sold for $2,000. What is net cash flow from investing activities
|
|
What went wrong at worldcom
: What went wrong at WorldCom? Why was the motivation for this issue occurring?What "warning signs" existed which should have highlighted
|
|
How forward contracts would be classified under aasb
: Explain the measurement requirements (on initial recognition and subsequent to initial recognition) for forward contracts in AASB 9 Financial Instruments.
|
|
Explain which cloud services you use
: In a few short paragraphs, explain which cloud services you use (Google, Amazon, iCloud, Verizon, Microsoft One, Dropbox, etc) and what type of information you.
|
|
What is the operating cash flow based on the indirect method
: Accounts payable increased by $9,000. Assume other accounts remaining the same, what is the operating cash flow based on the indirect method
|
|
What is the labor rate variance
: A restaurant has following information. Budget working hours: 3,900 and Actual hours worked: 4,000. What is the labor rate variance
|
|
Software engineering models and methods
: Select two types of software engineering models. Explain how they are used to help engineers define, design, and develop software systems.
|