$250,000
$1,458 x 12
Months = 17,496
17,496/0.07
=$249,942
Answer:
Rodgers can hedge its foreign risk by using a Contract to buy Yuan in the futures market today at an agreed upon price in 90 days.
Explanation:
Solution
Since Rodgers receives a delivery of paper from the Chinese Company and pays the company in Yuan, so he has to hedge his exchange rate risk by buying or purchasing Yuan future contract for 90 days.
So, Rodgers Incorporation should make a contract to buy Yuan in the future market today at an agreed price in 90 days.
Answer:
DR Warranty Payable $1.9m; CR Cash $1.9m.
Explanation:
When a company creates a payable it is obligated to pay a certain amount within a particular period.
In this case Google provides a 1 year warranty on its cell phones, so any claims that will attract repair or replacement is a payable obligation.
In the year 2019 they actually paid $1.9 million for repairs and replacements.
So the journal entry to be passed is DR Warranty Payable $1.9m; CR Cash $1.9m.
