Barnes Company Entered into a Forward Contract During the Current

question 14

Multiple Choice

Barnes Company entered into a forward contract during the current year to hedge the risk of a material supply cost increase.Based on the current market,at year-end the present value of the estimated amount they will have to pay in ten months is $750,000.What entry would be recorded at year-end closing,assuming that no amount was recorded for this contract until this time?

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Definitions:

Allman Brothers

The Allman Brothers Band was an influential American rock band known for their contributions to the development of Southern rock music in the 1970s.

Slope

The measure of the steepness or incline of a line, often defined as the ratio of the vertical change to the horizontal change between two points on the line.

Regression Line

A line of best fit through a scatterplot of data points in statistical analysis, representing the relationship between an independent variable and a dependent variable.

Contestant

An individual who takes part in a competition or contest.