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Unformatted text preview: 539 E x 3 F all 2009 S t ud e n t : ________________________ Answer Multiple Choice on your exam and your scantron . No explanation is needed if the question is conceptual. If a question requires calculation: TYPE well-labeled legible calculations on separate paper as appropriate. Well labeled calculations are required (or no credit even if you choose the correct answer) for any question that involves any math. A well labeled calculation has the following characteristics: the formula is given in words and numbers, each number has a word next to the number. If the number is measured in dollars, add a dollar sign, if units add the word unit (or proper name of the unit). Here is an example: You went to the produce market to buy 4 apples ($0.50 ea) and 6 oranges ($0.75 ea), How many pieces of fruit did you buy, how much did you spend? Your well labeled calculation: Formula: # apples + # oranges = # of fruit, Quantity X unit price = total price 4 apples @ $0.50 ea = $2.00 + 6 oranges @ $0.75 ea =: $4.50 = 10 pieces of fruit for $6.50 Answer the Problem on separate paper. Your answers must be typed . Turn in: your scantron, and separate at the beginning of class on Dec. 9, 2009. Late work is not accepted. In addition, complete and t urn in the My own work statement that is posted in blackboard. Keep your test. You are expected to conduct yourselves as professionals, do your own work and do not share your work with anyone. If you have any questions on the directions please ask before the test begins. I will not answer any questions after the test begins. Good Luck 1. Pigskin Co., a U.S. corporation, sold inventory on credit to a British company on April 8, 2008. Pigskin received payment of 35,000 British pounds on May 8, 2008. The exchange rate was $1 = 0.65 on April 8 and $1 = 0.70 on May 8. What amount of f or e ign e x c hang e gain or lo ss should be recognized? ( round t o t h e n e ar e st dollar ) A. $10,500 loss B. $10,500 gain C. $1,750 loss D. $3,846 loss E. No gain or loss should be recognized 2. Belsen purchased inventory on December 1, 2008. Payment of 200,000 stickles was to be made in sixty days. Also on December 1, Belsen signed a contract to purchase 200,000 in sixty days. The spot rate was $1 = 2.80 and the 60-day forward rate was $1 = 2.60. On December 31, the spot rate was $1 = 2.90 and the 30-day forward rate was $1 = 2.62. Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is .9901. In the journal entry to record the establishment of a forward exchange contract, at what amount should the F orward Con t ra c t account be recorded on December 1?...
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This note was uploaded on 02/23/2010 for the course ACCT 20842 taught by Professor Henry during the Spring '10 term at CSU San Bernardino.
- Spring '10