On December 1,20X5,Gillard Ltd

question 2

Multiple Choice

On December 1,20X5,Gillard Ltd.sold goods to International Traders Ltd. ,a company located in Switzerland for 500,000 Swiss francs (CHF) .At the date of sale,the spot rate was CHF1 = $1.0329.On the same date,Gillard acquired a 90-day forward contract at a rate of CHF1 = $1.0315.On March 1,20X6,Gillard receives full payment from International Traders and delivered the Swiss francs in execution of the forward contract.The spot rate at March 1,20X6 was CHF1 = $1.0287.Assume that Gillard has a December 31 year-end and that the spot rate on that date was CHF1 = $1.0302.At December 31,the forward rate for a 60 day contract was CHF1 = 1.0394.At December 31,what is the balance of Gillard's forward contract payable?

• A)$515,000
• B)$515,650
• C)$515,750
• D)$515,850