FOREIGN CURRENCY TRANSACTION PAS 21 PROBLEM 1 The following…

Question Answered step-by-step FOREIGN CURRENCY TRANSACTION PAS 21 PROBLEM 1 The following… FOREIGN CURRENCY TRANSACTIONPAS 21 PROBLEM 1  The following information applies to SLEX Corporation’s sale of 10,000 foreign currency units under a forward contract dated November 1, 2013 for delivery on January 31,2014: November 1, 2013December 31, 2013Spot ratesP0.80P0.8330-day futures0.790.8290-day futures0.780.81 SLEX entered into the forward contract to speculate in the foreign currency. In SLEX’s statement of comprehensive income for the year December 31,2013, what amount of forex loss should be reported from this forward contracta. P400b. P300c. P200d. P0 PROBLEM 2 On December 12, 2013, Hari Company entered into a forward contract to purchase 100,000 foreign currency in 90 days. The relevant exchange rates are as follows: Spot RateForward Rate for March 12,2013December 12,2013P0.88P0.90December  31, 20130.980.93 Assuming that forward contract is to hedge a commitment to purchase machinery being manufactured to Hari’s specifications. At December 31, 2013, what amount of foreign currency transaction gain(loss) should Hari include in the statement of comprehensive Income from this forward contract? a. P0b. P3,000c. P5,000d. P10,000 Business Accounting ACC 313 Share QuestionEmailCopy link Comments (0)