Scenario 10-2 On 4/1/X3, a U.S. Company Commits to Sell a Piece

question 19

Multiple Choice

Scenario 10-2
On 4/1/X3, a U.S. Company commits to sell a piece of equipment to a French customer. At that time, the U.S. company enters into a forward contract to sell foreign currency on 8/1/X3 (120 days) . Delivery will take place 7/1/X3 with payment due on 8/1/X3. The fiscal year end for the company is 6/30/X3. The sales price of the equipment is 200,000 Euros. Various exchange rates are as follows:
Discount rate is 12%.
-Refer to Scenario 10-2. What is the value of Forward Contract Payable-FC on 6/30?

• A) 112,000
• B) 112,040
• C) 116,000
• D) none of the above

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Definitions:

Sleepwalking

A disorder occurring during deep sleep in which an individual performs activities they are normally capable of only while awake, with limited consciousness and recollection.

Sleeptalking

The act of speaking during sleep without being aware of it, a phenomenon that can occur in any stage of the sleep cycle.

Narcolepsy

A chronic sleep disorder characterized by overwhelming daytime drowsiness and sudden attacks of sleep, often accompanied by loss of muscle tone triggered by strong emotions (cataplexy).

Night Terrors

Intense episodes of fear that occur during sleep, often resulting in screaming, thrashing, and a high level of distress, typically not remembered upon awakening.