What are the effects on net income from these transactions

Assignment Help Accounting Basics

Reference no: EM13138971

On April 1, Quality Corporation, a U.S. company, expects to sell merchandise to a French customer in three months, denominating the transaction in euros. On April 1, the spot rate is $1.41 per euro, and Quality enters into a three-month forward contract cash flow hedge to sell 400,000 euros at a rate of $1.36. At the end of three months, the spot rate is $1.37 per euro, and Quality delivers the merchandise, collecting 400,000 euros. What are the effects on net income from these transactions?

Do you know how to reach the answer ?

Reference no: EM13138971

Questions Cloud

What is the amount of research and development costs : In 2009, Austin Powers Corporation developed a new product that will be marketed in 2010. In connection with the development of this product, the following costs were incurred in 2009:

Probability that people show up exceed capacity of plane : Which the maximum number is 69, what is the probability that the number of people who show up will exceed the capacity of the plane?

What is taxable income for the wife : She is entitled to one exemption. Husband deducts itemized deductions of $8,200. What is taxable income for the wife?

What is the mass of the other isotope : Iron has a reported average atomic mass of 55.85 amu. If iron has two isotopes, one of which has 29 neutrons and an isotopic abundance of 57.50%, what is the mass of the other isotope?

What are the effects on net income from these transactions : On April 1, Quality Corporation, a U.S. company, expects to sell merchandise to a French customer in three months, denominating the transaction in euros.

Powerpoint presentation-long-term goals : Decide on 2 Long-Term Goals (1 academic & 1 professional): 1.For each Long-Term Goal: 1.Describe the goal in detail, indicating the desired end result and motivations for its completion 2.Develop three (3) Short-Term Goals that you will have to accom..

Explain the magnitude of the frequency component : What is the magnitude of the frequency component at 30 kHz? The square wave is passed through an ideal rectangular low pass filter that completely attenuates all frequencies higher than 35 kHz. Write down an equation for the spectrum at the output ..

How much have accumulated after taxes : Tina contributed $2,400 after taxes to Roth 401(k); leaves in account until retires in 40 years age 63, which earns annual 8 percent before tax rate; marginal tax rate 30 percent. How much have accumulated after taxes if she withdraws initial cont..

Calculate the atomic weight of the element : An element crystallizes in a face-centered cubic lattice. The edge of the unit cell is 392 pm, and the density of the crystal is 21.45 g/cm3. Calculate the atomic weight of the element (in g/mol)

User Account

All Pages