Show the journal entries related to the forward contract

Assignment Help Financial Accounting
Reference no: EM132942576

Nereus Elevation & Storage Ltd. (NES) operates grain elevators in southwestern Ontario. The company ordered £66,000 of grain handling equipment from a Scottish manufacturer on November 1, 2020. The equipment will be delivered on December 15, 2020 and has 30-day terms. On November 15, 2020 NES Ltd.'s treasurer decided to hedge the purchase with a forward contract. The forward rate on November 15 was 1.71 CAD/£. By December 31, the market rate had increased to 1.73 CAD/£, before it fell back to 1.67 CAD/£ on January 15.

Problem (a)
Show the journal entries related to the forward contract on November 15, 2020, December 31, 2020 and January 15, 2021, the settlement date.

Reference no: EM132942576

Questions Cloud

What is the overall price per bushel realized : What is the overall price per bushel realized by the oil distributor in May 2021 after taking into account hedging profits or losses? Show your calculations
Explain organizational behavior and organizational change : Organizational development helps healthcare managers to implement planned change for growth and survival. Many factors-such as the need for patient-centered car
Calculate an associated balancing adjustment : Calculate depreciation using the prime cost and diminishing value method and calculate an associated balancing adjustment following the disposal
Globalization of markets versus globalization of production : What's the difference between globalization of markets versus globalization of production? Please support your answers with some examples from real life
Show the journal entries related to the forward contract : Show the journal entries related to the forward contract on November 15, 2020, December 31, 2020 and January 15, 2021, the settlement date.
Competitive advantages of netflix business model : What were the competitive advantages of Netflix's business model? What characteristics of the Netflix information system define it as a strategic information sy
How do find what is the present value : You are offered ?$120,000 today or ?$320,000 in 15 years. Assuming that you can earn 11 percent on your? money, which should you? choose?
Explain the unique challenges to operations : Explain the unique challenges to operations that manufacturing and service organizations each face
Distinguish between terms used in hrm : This question has become more important in recent years as developed nations reach out in a variety of ways to lesser-developed ones. Examples include the G-20

Reviews

Write a Review

Financial Accounting Questions & Answers

  What are advantages of the free cash flow valuation model

Answer the following questions: What are the advantages of the free cash flow valuation model relative to the dividend growth model

  European call option written on southeastern airlines

Ken is interested in buying a European call option written on Southeastern Airlines, Inc., a non-dividend-paying common stock, with a strike price of $60

  Transaction data in accounts under on accounting equation

Michelle’s Accounting Service began operation on January 1, 2014. The company experienced the following events for its first year of operations: Organize the transaction data in accounts under on accounting equation. Prepare an income statement for 2..

  What is the interest income for current year for quatro co

.614; present value of 1 for 5 periods at 10% is .621; present value of 1 for 5 periods at 8% is .681. What is the interest income for the current year?

  How great a reserve should hold

You have granted an unsecured loan to a company. If are required to hold a credit reserve equal to expected credit loss, how great a reserve should you hold?

  What is the acquisition cost of each asset

Lump-Sum Purchase To add to his growing chain of grocery stores, on January 1, 2014, Danny Marks bought a grocery store of a small competitor for $435,000. An appraiser, hired to assess the acquired assets' values, determined that the land, building,..

  Prepare an statement of retained earnings for amos company

Prepare an statement of retained earnings for Amos Company. Retained earnings at December 31, 2018 (before discovery of error), $860,000.

  Uses the incremental-revenues allocation method

Trio Company sells three products, Do, Ra, and Mi, for prices of $8, $7, and $5, respectively. They also offer combinations of the products for reduced overall prices. If Trio Company uses the incremental-revenues allocation method and has designated..

  What was the capital gain from price appreciation on stock

An investor purchases one share of stock for $50. What was the capital gain from price appreciation on the stock, in percentage terms?

  What casualty loss deduction from accident can jim combine

What casualty loss deduction from this accident can Jim combine with his other casualty losses in computing his itemized deductions?

  How much should the company charge as an average premium

How much should the company charge as an average premium so that it breaks even on its claim costs? Calculate the expected value.

  Determine the statement of financial position

Determine the statement of financial position. Briefly describe the proper treatment of any item that you find incorrect. Assume the company follows IFRS.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd