Arlington Steel Company is a producer of raw steel and steel-related products. On January 3, 2022, Arlington enters into a firm commitment to purchase 10,000 tons of Iron ore pellets from a supplier to satisfy spring production demands. The purchase is to be at a fixed price of $77 per ton on April 30, 2022. To protect against the risk of changes in the fair value of the commitment contract, Arlington enters into a futures contract to sell 10,000 tons of iron ore on April 30 for $77/ton (the current price). The contract calls for net cash settlement, and the company must report changes in the fair values of its hedging instruments each quarter. Required: On March 31, the price of iron ore fell to $75/ton, and then to $74/ton on April 30. 1. Calculate the net cash settlement at April 30, 2022 2. Prepare the journal entries for the period January 3 to April 30, 2022, to record the firm commitment, necessary adjustments for changes in fair value, and settlement of the futures contract.
Answers: 3
Another question on Business
Business, 22.06.2019 00:00
Exercise 4-6 the following balances were taken from the books of alonzo corp. on december 31, 2017. interest revenue $86,000 accumulated depreciation—equipment $40,000 cash 51,000 accumulated depreciation—buildings 28,000 sales revenue 1,380,000 notes receivable 155,000 accounts receivable 150,000 selling expenses 194,000 prepaid insurance 20,000 accounts payable 170,000 sales returns and allowances 150,000 bonds payable 100,000 allowance for doubtful accounts 7,000 administrative and general expenses 97,000 sales discounts 45,000 accrued liabilities 32,000 land 100,000 interest expense 60,000 equipment 200,000 notes payable 100,000 buildings 140,000 loss from earthquake damage 150,000 cost of goods sold 621,000 common stock 500,000 retained earnings 21,000 assume the total effective tax rate on all items is 34%. prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (round earnings per share to 2 decimal places, e.g. 1.48.)
Answers: 2
Business, 22.06.2019 09:00
Afood worker has just rinsed a dish after cleaning it.what should he do next?
Answers: 2
Business, 22.06.2019 17:40
Adamson company manufactures four lines of garden tools. as a result of an activity analysis, the accounting department has identified eight activity cost pools. each of the product lines is produced in large batches, with the whole plant devoted to one product at a time. classify each of the following activities or costs as either unit-level, batch-level, product-level, or facility-level. activities (a) machining parts. (b) product design. (c) plant maintenance. (d) machine setup. (e) assembling parts. (f) purchasing raw materials. (g) property taxes. (h) painting.
Answers: 2
Business, 22.06.2019 22:40
Effective capacity is the: a. capacity a firm expects to achieve given the current operating constraints.b. minimum usable capacity of a particular facility.c. sum of all the organization's inputs.d. average output that can be achieved under ideal conditions.e. maximum output of a system in a given period.
Answers: 1
You know the right answer?
Arlington Steel Company is a producer of raw steel and steel-related products. On January 3, 2022, A...
Questions
Business, 16.07.2019 19:50
English, 16.07.2019 19:50
Mathematics, 16.07.2019 19:50
History, 16.07.2019 19:50
Mathematics, 16.07.2019 19:50
Mathematics, 16.07.2019 19:50
Social Studies, 16.07.2019 19:50
Mathematics, 16.07.2019 19:50
