November 1, 2004, for delivery on January 31, 2005: Flint
entered into the forward contract in order to speculate in the
foreign currency. In Flint's income statement for the year
ended December 31, 2004, what amount of loss should be
reported from this forward contract?
Question 8
In 2003, a personal injury lawsuit was brought against Halsey
Co. Based on counsel's estimate, Halsey reported a $50,000
liability in its December 31, 2003, balance sheet. In November
2004, Halsey received a favorable judgment, requiring the
plaintiff to reimburse Halsey for expenses of $30,000. The
plaintiff has appealed the decision, and Halsey's counsel is
unable to predict the outcome of the appeal. In its December
31, 2004, balance sheet, Halsey should report what amounts of
asset and liability related to these legal actions?
Question 9
Which of the following is not a contingent liability under
international accounting standards?
Question 10
Based on preliminary discussions with a foreign customer,
Alcoco, a U.S. entity, budgeted a significant sale to the foreign
entity denominated 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