What is the amount of the exchange gain or loss from the recognition of the hedge discount recognized during 2017?
RXN's year-end is on December 31. On November 1, 2017 when the U.S. dollar was worth CDN$1.165, RXN sold merchandise to an American client for US$300,000. Full payment of this invoice was expected by March 1, 2018. On December 1, the spot rate was CDN$1.1450 and the three-month forward rate was CDN$1.1250.
In order to minimize its Foreign Exchange risk and exposure, RXN entered into a contract with its bank on December 1, 2017 to deliver US$300,000 in three months' time. The spot rate at year-end was CDN$1.16 and the forward rate from December 31, 2017 to March 1, 2018 was CDN$1.14. On March 1, 2018, RXN received
the US$300,000 from its client and settled its contract with the bank. The forward contract was to be accounted for as a fair value hedge of the US dollar receivable.
Significant dates and exchange rates pertaining to this transaction are as follows:
A) A loss of CDN$3,000.
B) Nil.
C) A loss of CDN$4,500.
D) A gain of $ CDN4,500.
B) Nil.
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Answer the following statement true (T) or false (F)
Answer the following statement(s) true (T) or false (F)
1. Refer to the shipping costs for The Terra Cotta Company. Solve the transportation problem using Excel Solver. (Remember that in balanced transportation problems all constraints--except the nonnegativity constraints of the decision variables--should be set as an equal to (=) sign in the Excel Solver dialogue.) At the optimum solution, the shipping cost from all plants to Winston is $28,874. 2. Refer to the shipping costs for The Terra Cotta Company. Solve the transportation problem using Excel Solver. (Remember that in balanced transportation problems all constraints--except the nonnegativity constraints of the decision variables--should be set as an equal to (=) sign in the Excel Solver dialogue.) At the optimum solution the lowest nonzero shipment is from Aberdeen to Lakeland. 3. Refer to the shipping costs for The Terra Cotta Company. Solve the transportation problem using Excel Solver. (Remember that in balanced transportation problems all constraints--except the nonnegativity constraints of the decision variables--should be set as an equal to (=) sign in the Excel Solver dialogue.) At the optimum solution, the quantity shipped from Escondido to Kalamazoo is more than the quantity shipped from Cairo to Kalamazoo. 4. Refer to the shipping costs for The Terra Cotta Company. Solve the transportation problem using Excel Solver. (Remember that in balanced transportation problems all constraints--except the nonnegativity constraints of the decision variables--should be set as an equal to (=) sign in the Excel Solver dialogue.) At the optimum solution, the quantity shipped from Birmingham to Madison is more than double the quantity shipped from Brighton to Madison.
State all appropriate conclusions.
