On December 1, 2018, Joseph Company, a U

question 76

Multiple Choice

On December 1, 2018, Joseph Company, a U.S.company, entered into a three-month forward contract to purchase 50,000 pesos on March 1, 2019, as a fair value hedge of a foreign currency denominated account payable.The following U.S.dollar per peso exchange rates apply: Joseph's incremental borrowing rate is 12 percent.The present value factor for two months at an annual interest rate of 12 percent is .9803.Which of the following is included in Joseph's December 31, 2018 balance sheet for the forward contract?

• A) $5,146.58 asset.
• B) $5,146.58 liability.
• C) $ 500.00 liability.
• D) $ 490.15 asset.
• E) $ 490.15 liability.

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Definitions:

Personnel Department

The department within an organization that is responsible for hiring, training, and managing employees.

Assembly Department

A division within a manufacturing company where assembled components are put together to form a finished product.

Cost Allocated

The distribution of an indirect cost or group of costs to the various departments, projects, or products that benefit from those costs.

Support Department

An organizational unit that provides essential services, support, or resources that help other direct-function departments operate effectively.