Valix Finacc vol 1 Problem 14-12

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 14-12

   2008

Dec.  31   Forward contract receivable                                              500,000

                       Unrealized gain – forward contract (50,000 x P10)                               500,000

   2009

March 1   Unrealized gain – forward contract                                    100,000

                        Forward contract receivable                                                              100,000

           

                Forward contract receivable – 3/1/2009 (500,000 x P8)                               400,000

                Forward contract receivable – 12/31/2008                                                 500,000

                Decrease in derivative asset                                                                      (100,000)

            1   Cash                                                                                   400,000

                        Forward contract receivable                                                              400,000

            1   Purchases (500,000 x 58)                                                    2,900,000

                        Cash                                                                                                  2,900,000

           

            1   Unrealized gain – forward contract                                   400,000

                        Gain on forward contract                                                                  400,000