Johnson Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2022, with payment of 25,000 dinars to be received on March 1, 2023. Johnson enters into a forward contract on December 1, 2022, to sell 25,000 dinars on March 1, 2023. The forward contract is not designated as a hedge. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2022 December 31, 2022 March 1, 2023 $1,500 O $1,800 $2,400 Spot Rate $2,000 $2.26 $2.40 $2.55 Forward Rate In its income statement for the year ended December 31, 2023, Johnson should report a foreign currency transaction gain of (to March 1, 2023) $2.30 2.48 G

Johnson Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2022, with payment of 25,000 dinars to be received on March 1, 2023. Johnson enters into a forward contract on December 1, 2022, to sell 25,000 dinars on March 1, 2023. The forward contract is not designated as a hedge. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2022 December 31, 2022 March 1, 2023 $1,500 O $1,800 $2,400 Spot Rate $2,000 $2.26 $2.40 $2.55 Forward Rate In its income statement for the year ended December 31, 2023, Johnson should report a foreign currency transaction gain of (to March 1, 2023) $2.30 2.48 G

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 21E

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