Larson, Inc What Will Be the Recorded Amount of the Forward Contract

question 35

Multiple Choice

Larson, Inc.sold merchandise for 600,000 FC to a foreign vendor on November 30, 2020.Payment in foreign currency is due January 31, 2021.On the same day, Larson signed an agreement with a foreign exchange broker to sell 600,000 FC on January 31, 2021.Exchange rates to purchase 1 FC are as follows: ?

$$\begin{array} { l r r r } & \text { Nov. } 30,2020 & \text { Dec. } 31,2020 & \text { Jan. } 31,2021 \\\text { Spot } & \$ 1.49 & \$ 1.46 & \$ 1.43 \\30 \text { day } & \$ 1.48 & \$ 1.43 & \$ 1.44 \\60 \text { day } & \$ 1.47 & \$ 1.40 & \$ 1.42\end{array}$$ What will be the recorded amount of the Forward Contract on November 30, 2020?

• A)$894,000
• B)$888,000
• C)$882,000
• D)$0

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Definitions:

Organizational Behavior

The study of how individuals and groups interact within an organization, focusing on improving organizational effectiveness, culture, and employee well-being.

Autocratic Model

A leadership or governance style characterized by individual control over all decisions and little input from group members.

Bureaucracies

Administrative systems organized into hierarchical structures, governing organizations with strict rules and protocols to ensure efficiency and order.

Behavior Patterns

Repetitive and habitual ways of acting or responding that characterize an individual or group over time.