Questions from Advanced Accounting

Q: Refer to Problem P 13-3 and assume that instead of

Refer to Problem P 13-3 and assume that instead of initially signing a variable-rate loan, Cam receives a fixed rate of 8 percent on the loan on January 1, 2016. Instead of entering into a pay-fixed,...

Q: On April 1, 2016, Bay delivers merchandise to Ram for

On April 1, 2016, Bay delivers merchandise to Ram for 200,000 pesos when the spot rate for pesos is 6.0496 pesos. The receivable from Ram is due May 31. Also on April 1, Bay hedges its foreign currenc...

Q: On October 2, 2016, Flx, a U.S

On October 2, 2016, Flx, a U.S. company, entered into a forward contract to purchase 50,000 euros for delivery in 180 days at a forward rate of $0.6350. The forward contract is a derivative instrument...

Q: Bat, a U.S. corporation, anticipates a contract

Bat, a U.S. corporation, anticipates a contract based on December 2, 2016, discussions to sell heavy equipment to Ram of Scotland for 500,000 British pounds. The equipment is likely to be delivered an...

Q: Mar, a U.S. firm, purchased equipment for

Mar, a U.S. firm, purchased equipment for 400,000 British pounds from Thc on December 16, 2016. The terms were n/30, payable in British pounds. On December 16, 2016, Mar also entered into a 30-day for...

Q: NGW, a consumer gas provider, estimates a rather cold winter

NGW, a consumer gas provider, estimates a rather cold winter. As a result it decides to enter into a futures contract on the NYMEX for natural gas on November 2, 2016. The trading unit is 10,000 milli...

Q: Ins makes sophisticated medical equipment. A key component of the equipment

Ins makes sophisticated medical equipment. A key component of the equipment is Grade A silver. On May 1, 2016, Ins enters into a firm purchase agreement to buy 1,200,000 troy ounces (equal to 100,000...

Q: On January 1, 2016, Cam borrows $400,000

On January 1, 2016, Cam borrows $400,000 from Ven. The five-year term note is a variable-rate one in which the 2016 interest rate is determined to be 8 percent, the LIBOR rate at January 1, 2016, +2%....

Q: Par Corporation acquired an 80 percent interest in Sip Corporation for $

Par Corporation acquired an 80 percent interest in Sip Corporation for $180,000 cash on January 1, 2016, when Sip had capital stock of $50,000 and retained earnings of $150,000. The excess of fair val...

Q: What criteria are required for a hedged item to qualify for special

What criteria are required for a hedged item to qualify for special accounting as a cash-flow hedge?