On June 1, 2013, Vandelay Co

question 29

Multiple Choice

On June 1, 2013, Vandelay Co. entered into a 90-day forward contract to sell $1,000,000 Singapore dollars (USD) to its bank on August 29, 2013. The following information has been provided:

June 1, 90-day forward rate USD$1 = $0.9750
June 30, 60-day forward rate USD$1 = $0.9630
August 29, spot rate USD$1 = $0.948
Vandelay has a June 30 year-end. What is the exchange gain (loss) at June 30, 2013?

• A)$(12,000)
• B)$(27,000)
• C)$(15,000)
• D)$12,000

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Definitions:

Profitable

A state where a business or investment generates more revenue than the expenses incurred, leading to a financial gain.

Retailers

Businesses that sell goods directly to consumers, acting as the final link in the supply chain.

Customer Awareness

The degree to which potential customers recognize or are familiar with a product, brand or company.

Promotional Activities

Marketing efforts designed to inform, persuade, or remind consumers about a company’s products or services.