On March 1, Forward Import-Export Company purchased merchandise costing 70,100 Mexican pesos. Payment was due, in pesos, on June 1. The exchange rates of pesos for $1 were as follows: March 1 $1 = 10.9 pesos June 1 $1 = 11.4 pesos Round all answers to the nearest dollar. Required: 1. What is the liability in dollars on March 1? 2. What is the liability in dollars on June 1? 3. If Forward pays on June 1, is there an exchange gain or loss? If so, how much is it?
On March 1, Forward Import-Export Company purchased merchandise costing 70,100 Mexican pesos. Payment was due, in pesos, on June 1. The exchange rates of pesos for $1 were as follows: March 1 $1 = 10.9 pesos June 1 $1 = 11.4 pesos Round all answers to the nearest dollar. Required: 1. What is the liability in dollars on March 1? 2. What is the liability in dollars on June 1? 3. If Forward pays on June 1, is there an exchange gain or loss? If so, how much is it?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On March 1, Forward Import-Export Company purchased merchandise costing 70,100 Mexican pesos. Payment was due, in pesos, on June 1. The exchange rates of pesos for $1 were as follows:
March 1 $1 = 10.9 pesos
June 1 $1 = 11.4 pesos
Round all answers to the nearest dollar.
Required:
1. What is the liability in dollars on March 1?
2. What is the liability in dollars on June 1?
3. If Forward pays on June 1, is there an exchange gain or loss? If so, how much is it?
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