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in its foreign currency expected in June 2009. To hedge the risk of an
adverse exchange rate change on the dollar value of the expected sale,
on January 2, 2009, Alcoco entered into a forward exchange contract to
sell an amount of the foreign currency equal to the expected sale. On
March 31, 2009, the value of the expected sale amount in dollars had
decreased by $3,800. The fair value of the forward contract at that date
had increased by $4,000. Which one of the following is the amount that
should be recognized in other comprehensive income for the forward
contract only (the hedging instrument) in Alcoco's quarterly financial
statements as of March 31?
Question 11
Ute Co. had the following capital structure during 2004 and 2005:
Preferred stock is not considered a common stock equivalent. Ute
reported net income of $500,000 for the year ended December 31, 2005.
Ute paid no preferred dividends during 2004 and paid $16,000 in
preferred dividends during 2005. In its December 31, 2005, income
statement, what amount should Ute report as earnings per share?
Question 12
A manufacturer of household appliances may incur a loss due to the
discovery of a defect in one of its products. The occurrence of the loss is
reasonably possible and the resulting costs can be reasonably estimated.
This possible loss should be
Question 13
A hedge to offset the risk of loss on a recognized asset or liability is
which of the following types of hedge?
Question 14