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book Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik cover

Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Edition 5ISBN: 978-1260575910
book Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik cover

Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Edition 5ISBN: 978-1260575910
Exercise 60
On December 1, 2013, Barnum Company (a U.S.-based company) entered into a three month forward contract to purchase 1,000,000 ringgits on March 1, 2014. The following
U)S. dollar per ringgit exchange rates apply:
On December 1, 2013, Barnum Company (a U.S.-based company) entered into a three month forward contract to purchase 1,000,000 ringgits on March 1, 2014. The following U)S. dollar per ringgit exchange rates apply:   Barnum's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. Which of the following correctly describes the manner in which Barnum Company will report the forward contract on its December 31, 2013, balance sheet A) As an asset in the amount of $1,960.60. B) As an asset in the amount of $3,921.20. C) As a liability in the amount of $6,862.10. D) As a liability in the amount of $4,901.50.
Barnum's incremental borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803.
Which of the following correctly describes the manner in which Barnum Company will report the forward contract on its December 31, 2013, balance sheet
A) As an asset in the amount of $1,960.60.
B) As an asset in the amount of $3,921.20.
C) As a liability in the amount of $6,862.10.
D) As a liability in the amount of $4,901.50.
Explanation
Verified
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Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik
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