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Iteru [2.4K]
3 years ago
12

On November 3, the spot price for cotton was $0.81/lb., and the February futures price was $0.83/lb. On November 3, Levi Strauss

sold 200 futures contracts on the commodity exchange at $0.83/lb. for delivery in February. Each contract was for 25,000 lbs. Levi Strauss designated these contracts as a cash flow hedge of 5 million lbs. of current inventory which it expected to sell in February. The average spot of this inventory when purchased was $0.58/lb. Levi Strauss properly documented the hedge and employed hedge accounting. On November 30, the company’s fiscal year end, the February commodity exchange futures price was $0.85/lb.If, on November 30, Levi Strauss concluded that the hedge was 100% effective, it should record the hedged cotton inventory in the November 30 balance sheet atA: $4,350,000B: $4,250,000C: $3,000,000D: $2,900,00
Business
1 answer:
bezimeni [28]3 years ago
4 0

Answer:

C : $3,000,000

Explanation:

The Levi Strauss has sold futures at the price of $0.83/lb. The spot price for cotton is $0.81/lb. The difference between spot and exchange price is 0.02/lb ($0.83/lb - $0.81/lb). On November 30, The future prices of cotton raised to 0.85/lb. The average spot of the inventory when purchased was 0.58/lb. To record the inventory in balance sheet we will use average spot plus difference of spot and exchange price $0.58/lb + $0.02/lb = $0.60/lb. The total amount which will be reported in balance sheet will be 200 futures contacts * 25,000lbs * $060/lb = $3,000,000.

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BartSMP [9]

Answer:

Option B, Jamal is entitled to revoke acceptance because he took back the motorcycle after the seller's assurance that the nonconformity would be cured.

Explanation:

The primary purpose of purchasing goods is to obtain conforming goods of the desired quality. Occasionally, the seller delivers non-conforming goods, goods that fail to meet the contractual obligation (obligations include: seller's description, statements promises...). In situations like this the buyer may revoke his acceptance if already accepted or reject the delivery upon discovery.

If delivery is already accepted, acceptance may be revoked;

* On the reasonable grounds that its non-conformity would be cured and it has not be cured.

* Without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of delivery before acceptance or by the seller's assurances.

Therefore, option B best suits the question. Under these circumstances, Jamal is entitled to revoke his acceptance because the he took back the motorcycle after the seller's assurance that the non-conformity would be cured which was not, even after several complaints.

3 0
3 years ago
_____ is defined as a strategy in which a firm engages in several different businesses that may or may not be related in order t
Vlad1618 [11]

Answer:

Diversification

Explanation:

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6 0
3 years ago
The increase in unemployment that occurs during recessions and depressions is called: Multiple choice question. structural unemp
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Answer:

Cyclical unemployment

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3 years ago
Coca-Cola sells two different zero-calorie versions of Coke: Diet Coke and Coke Zero. It has chosen to attempt to appeal to men
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Answer:

The answer is market positioning.  

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3 years ago
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Liula [17]

Answer:

50 customers per day

Explanation:

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Current demand = Average number of  pets per day × estimated percentage

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=  44.4 per day

Now the capacity required per day would be

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= 44.2 ÷ (1 - 0.12)

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3 years ago
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