What is the ending balance of accounts receivable

Reference no: EM131980983

Question: HD Company sells goods to a Spanish customer at a price of 1 million euros. HD shipped good to its customer on December 1, Year1. The payment was received on March 1, Year2. On December 1, Year1, HD signs a contract with First National Bank to deliver 1,000,000 euros in three months in exchange for $1,485,000

Date sport rate forward rate Fair Value of Forward Contract

12/1/ Year1 $1.600 $1.485

12/31/Year1 $1.700 $1.520 -35000

3/1/Year2 $1.500 $1.500 -15000

1. HD designates the forward contract as a cash flow hedge. What is the ending balance of accumulated other comprehensive income at the end of Year1?

2. HD designates the forward contract as a cash flow hedge. HD uses the straight-line method to allocate a portion of the forward contract discount. What is the net impact on Year 1 net income?

3. HD designates the forward contract as a cash flow hedge. What is the ending balance of accounts receivable at the end of Year1?

4. HD designates the forward contract as a cash flow hedge. What is the ending balance of accumulated other comprehensive income at the end of Year2?

5. HD designates the forward contract as a cash flow hedge. HD uses the straight-line method to allocate a portion of the forward contract discount. What is the net impact on Year 2 net income?

6. HD designates the forward contract as a fair value hedge. What is the net impact on Year 1 net income?

7. HD designates the forward contract as a fair value hedge. What is the net impact on Year 2 net income?

Reference no: EM131980983

Questions Cloud

Number of common shares outstanding for general electric : What are the number of common shares outstanding for general electric 2012?

What is the current intrinsic value of vandell stock : Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30%.

Compute the realized rate of return for investors : Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price.

Bonds in order to sell the bonds-with-warrants at par : What coupon interest rate must be set on the bonds in order to sell the bonds-with-warrants at par?

What is the ending balance of accounts receivable : HD designates the forward contract as a cash flow hedge. What is the ending balance of accounts receivable at the end of Year1?

Estimated floor price of the convertible at the end of year : What is the estimated floor price of the convertible at the end of Year 3?

Computer-based order entry system : Project Evaluaton. Your firm is contemplating the purchase of a new $520,000 computer-based order entry system.

What is minimum variance hedge ratio : What is the minimum variance hedge ratio? What is optimal number of futures contracts required if daily settlement of futures contracts were taken into account?

Company to reduce energy losses in the equipment : There are two manufacturing processes that can be utilized by a company to reduce energy losses in the equipment.

User Account

All Pages