Supposing we the contract entered in is at the price of $285. We would like to evaluate our position with respect to gain or loss accrued on the forward contract 4 months later where the price of the asset is $293.15. The market value of the forward contract at this point in time from our perspective would be: a. -$17.14 b. $8.15 c. -$8.15 d. $17.14
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- Suppose the forward contract is entered into at the price computed is $365.42 and 4 months later, the price of the asset is $325.45. The investor would like to evaluate her position with respect to any gain or loss accrued on the forward contract. The market value of the forward contract at this point in time from the perspective of the investor would be: a. -$39.97 b. -$19.57 c. $9.63 d. $19.57Assuming the contract entered into at the price you computed is $365.42 and the underlying asset is $395.68 at expiration. The market value and the overall position of the forward contract on the perspective of the investor would be: a. -$30.26 b. -$38.05 c. $30.26 d. $38.05Answer the following questions.(a) On May 1, 2017, Goldberg Company sold some machineryto Newlin Company on an installment contractbasis. The contract required five equal annualpayments, with the first payment due on May 1,2017. What present value concept is appropriate forthis situation?(b) On June 1, 2017, Seymour Inc. purchased a new machinethat it does not have to pay for until June 1, 2019.The total payment on June 1, 2019, will include bothprincipal and interest. Assuming interest at a 12% rate,the cost of the machine would be the total paymentmultiplied by what time value of money concept?(c) Costner Inc. wishes to know how much money itwill have available in 5 years if five equal amounts of$35,000 are invested, with the first amount investedimmediately. What interest table is appropriate forthis situation?(d) Megan Hoffman invests in a “jumbo” $200,000,3-year certificate of deposit at First Wisconsin Bank.What table would be used to determine the amountaccumulated at the end of…
- Assuming the forward contract entered in at the price of $285 and the price of the underlying asset instead is $298.32 at expiration. The market value and the overall position of the forward contract from our perspective would be: a. $13.32 b. -$13.32 c. $28.47 d. -$28.471) How much is the transaction price when the contract was entered into on July 1, 2021? 20,825,000 20,780,000 20,390,000 20,705,000Zoro Company enters into a contract to sell Product A and Product B on July 1, 2020 for an upfront cash payment of P250,000. Product A will be delivered at the end of the year, and Product B will be delivered the following year. Zoro Company sells Product A for P80,000 and Product B for P240,000. 1. How many performance obligations are there in the contract? 2.what is the transaction price? 3.how much is revenue to be recognized in 2020? 4. how much is revenue to be recognized in 2021?
- Q4 An analyst holds a set of forward contracts on euro, against usd (=hc). Compute the fair value of the contracts.(a) Purchased: eur 1m 60 days (remaining). Historic rate: 1.350; current rate for same date: 1.500; risk-free rates (simple per annum): 3% in usd, 4% in euro. (b) Purchased: eur 2.5m 75 days (remaining). Historic rate: 1.300; current spot rate: 1.5025; risk-free rates (simple per annum): 3% in usd, 4% in euro. (c) Sold: eur 0.75m 180 days (remaining). Historic rate: 1.400; current rate for same date: 1.495; risk-free rates (simple per annum): 3% in usd, 4% in euro.At December 31, 2021, ABC Company has an outstanding purchase commitment with contract purchase price of P 1,000,000 and the market value on this date is P 950,000 which is different from the expected market value of P 990,000. QUESTION: What is the amount of Loss on Purchase Commitment to be recorded at December 31, 2021?SMC entered into a long-term construction contract for 3 years. Contract price agreed was P4,150,000. The outcome of the contract was estimated reliably. The following data were ascertained for the contract: December 31, 2017 December 31, 2018Percentage of completion 30% 82.5%Estimated cost to complete 1,960,000 840,000 What is the construction cost of sales for year 2018?A. 3,960,000 C. 3,233,750B. 3,120,000 D. 4,478,750
- Answer the following questions. a. On May 1, 2020, Goldberg Company sold some machinery to Newlin Company on an installment contract basis. The contract required five equal annual payments, with the first payment due on May 1, 2020. What present value concept is appropriate for this situation? b. On June 1, 2020, Seymour Inc. purchased a new machine that it does not have to pay for until June 1, 2022. The total payment on June 1, 2022, will include both principal and interest. Assuming interest at a 12% rate, the cost of the machine would be the total payment multiplied by what time value of money concept? c. Costner Inc. wishes to know how much money it will have available in 5 years if five equal amounts of $35,000 are invested, with the first amount invested immediately. What interest table is appropriate for this situation? d. Megan Hoffman invests in a “jumbo” $200,000, 3-year certificate of deposit at First Wisconsin Bank. What table would be used to determine the…Consider a forward contract that expires in 9 months. The underlying asset is worth $250 and the forward price is $285. Suppose we hold the long position in the forward contract. The risk free rate is 8 percent. The appropriate forward price should be: a. $270.00 b. $35.00 c. $285.00 d. $264.85Suppose that a contract is started on January 1, 2018, with an estimated completion date of December 31, 2019. The final contract price is P1,500,000. In the first year covering January 1 to December 31, 2018: Cost incurred amounted to P600,000. Half the work on the contract was completed. Certificates of work completed have been issued to the value of P750,000. It is estimated with reasonable certainty that further costs to completion in 2019 will be P600,000. Requirements: 1. The contract is certified at what percentage of completion? 2. At Dec 31, 2018, the entity will recognize how much profit? 3. At Dec 31, 2018, the entity will recognize how much contract asset?