On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows:   Spot Rate Forward Rate for March 12, 20X6 December 12, 20X5 $ 0.88 $ 0.90 December 31, 20X5 0.98 0.93   3. Dahl entered into the first forward contract to manage the foreign currency risk from a purchase of inventory in November 20X5, payable in March 20X6. The forward contract is not designated as a hedge. At December 31, 20X5, what amount of foreign currency transaction gain should Dahl include in income from this forward contract? multiple choice $10,000 $0 $5,000 $3,000   4. Dahl entered into the second forward contract to hedge a commitment to purchase equipment being manufactured to Dahl’s specifications. At December 31, 20X5, what amount of foreign currency transaction gain should Dahl include in income from this forward contract? multiple choice $10,000 $0 $5,000 $3,000 5. Dahl entered into the third forward contract for speculation. At December 31, 20X5, what amount of foreign currency transaction gain should Dahl include in income from this forward contract? multiple choice $3,000 $0 $5,000

On June 1, Parker-Mae Corporation (a U.S.-based company) received an order to sell goods to a foreign customer at a price of 100,000 francs. Parker-Mae will ship the goods and receive payment in three months, on September 1. On June 1, Parker-Mae purchased an option to sell 100,000 francs in three months at a strike price of $1.00. The company designated the option as a fair value hedge of a foreign currency firm commitment. The option's time value is excluded in assessing hedge effectiveness, and the change in time value is recognized in net income. The fair value of the firm commitment is measured by referring to changes in the spot rate (discounting to present value is ignored). Relevant exchange rates and option premiums for the franc are as follows: Date June 1 June 30 September 1 Spot Rate $1.00 0.94 0.90 Put Option Premium for September 1 (strike price $1.00) $ 0.020 0.072 N/A Parker-Mae Corporation must close its books and prepare its second-quarter financial statements on June…

Answer the attached question

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D Company purchases 80,000 US dollars under a forward contract dated November 1, 2020, for delivery on January 31, 2021. The following are the direct exchange rates of a US dollar:                                                                  11/01/2020           12/31/2020     01/31/2021 Spot rates                                                    45.75                      44.90                  44.5030-day forward                                          44.30                      46.15                 43.2060-day forward                                          47.65                       44.30                45.7590-day forward                                          45.25                       45.45                44.10                If the forward contract is a hedge of an import transaction of $80,000 dated November 1, 2020, payable on January 31, 2021, how much forex gain should the company report on its December 31, 2020 statement of comprehensive income?

Pacifico Company, a U.S.-based importer of beer and wine, purchased 1,100 cases of Oktoberfest-style beer from a German supplier for 242,000 euros. Relevant U.S. dollar exchange rates for the euro are as follows:   Date Spot Rate Forward Rateto October 15 Call Option Premiumfor October 15(strike price $1.10) August 15 $ 1.10   $ 1.16   $ 0.05   September 30   1.15     1.19     0.06   October 15   1.18     1.18  (spot)   N/A       The company closes its books and prepares third-quarter financial statements on September 30.   Assume that the beer arrived on August 15, and the company made payment on October 15. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this import purchase. Assume that the beer arrived on August 15, and the company made payment on October 15. On August 15, the company entered into a two-month forward contract to purchase 242,000 euros. The company designated the forward contract as a cash…

An investor in England purchased a 91-day $1,000 par T-bill for $987.65. At that time, the exchange rate was $1.75 per pound. At maturity, the exchange rate was $1.83 per pound. What was the investor’s holding period return in pounds?

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