31 on march 1 20×2 mcbride ltd issued a purchase order to tao heavy machines singapo 4309884

31) On March 1, 20X2, McBride Ltd. issued a purchase order to Tao Heavy Machines (Singapore) Inc. to acquire a drilling machine for $400,000 SGD. On the same day, McBride entered into a forward contract to receive $400,000 SGD on July 31, 20X2. The machine was delivered on June 1, 20X2 and payment was made July 31, 20X2. McBride has an April 30 year-end. The following information has been provided:

Date	Spot Rate	Forward rate to July 31, 20X2
March 1, 20X2	.7686	.7810
April 30, 20X2	.7702	.7818
June 1, 20X2	.7940	.7985
July 31, 20X2	.7995	n/a

Assume that the transaction qualifies as a fair-value hedge. What is the cost of the hedge?

A) $2,200

B) $4,640

C) $4,960

D) $6,680

32) Where is the ineffective portion of a cash-flow hedge recognized on the financial statements?

A) As part of net income

B) As part of other comprehensive income

C) As a separate component of equity

D) It does not appear on the financial statements.

33) Under IFRS, which of the following statements is true?

A) The hedge of a forecasted transaction is accounted for using a fair-value

hedge.

B) The hedge of a firm commitment is accounted for using a cash-flow hedge.

C) The gain or loss on a hedging instrument under a cash-flow hedge is first

reported as other comprehensive income and then reclassified to income

when the hedged item affects income.

D) The gain or loss on a hedging instrument under a fair-value hedge is first

reported as other comprehensive income and then reclassified to income

when the hedged item affects income.

34) On March 1, 20X2, McBride Ltd. issued a purchase order to Tao Heavy Machines (Singapore) Inc. to acquire a drilling machine for $400,000 SGD. On the same day, McBride entered into a forward contract to receive $400,000 SGD on July 31, 20X2. The machine was delivered on June 1, 20X2 and payment was made July 31, 20X2. McBride has an April 30 year-end. The following information has been provided:

Date	Spot Rate	Forward rate to July 31, 20X2
March 1, 20X2	.7686	.7810
April 30, 20X2	.7702	.7818
June 1, 20X2	.7940	.7985
July 31, 20X2	.7995	n/a

Assume that the transaction qualifies as a cash-flow hedge. What amount should be recognized as other comprehensive income at April 30, 20X2?

A) $  320

B) $  640

C) $4,640

D) $5,280

35) On March 1, 20X2, McBride Ltd. issued a purchase order to Tao Heavy Machines (Singapore) Inc. toacquire a drilling machine for $400,000 SGD. On the same day, McBride entered into a forward contract to receive $400,000 SGD on July 31, 20X2. The machine was delivered on June 1, 20X2 and payment was made July 31, 20X2. McBride has an April 30 year-end. The following information has been provided:

Date	Spot Rate	Forward rate to July 31, 20X2
March 1, 20X2	.7686	.7810
April 30, 20X2	.7702	.7818
June 1, 20X2	.7940	.7985
July 31, 20X2	.7995	n/a

Assume that the transaction qualifies as a cash-flow hedge. What is the carrying value of the machine?

A) $307,440

B) $310,600

C) $312,400

D) $317,600

36) On March 1, 20X2, McBride Ltd. issued a purchase order to Tao Heavy Machines (Singapore) Inc. to acquire a drilling machine for $400,000 SGD. On the same day, McBride entered into a forward contract to receive $400,000 SGD on July 31, 20X2. The machine was delivered on June 1, 20X2 and payment was made July 31, 20X2. McBride has an April 30 year-end. The following information has been provided:

Date	Spot Rate	Forward rate to July 31, 20X2
March 1, 20X2	.7686	.7810
April 30, 20X2	.7702	.7818
June 1, 20X2	.7940	.7985
July 31, 20X2	.7995	n/a

Assume that the transaction qualifies as a cash-flow hedge. What is the net exchange gain (loss) that McBride should recognize in the period from May 1-July 31, 20X2?

A) $(2,200)

B) $(1,800)

C) $ 0

D) $400

37) On March 1, 20X2, McBride Ltd. issued a purchase order to Tao Heavy Machines (Singapore) Inc. to acquire a drilling machine for $400,000 SGD. On the same day, McBride entered into a forward contract to receive $400,000 SGD on July 31, 20X2. The machine was delivered on June 1, 20X2 and payment was made July 31, 20X2. McBride has an April 30 year-end. The following information has been provided:

Date	Spot Rate	Forward rate to July 31, 20X2
March 1, 20X2	.7686	.7810
April 30, 20X2	.7702	.7818
June 1, 20X2	.7940	.7985
July 31, 20X2	.7995	n/a

Assume that the transaction qualifies as a cash-flow hedge. What is the cost of the hedge?

A) $ 1,800

B) $ 2,200

C) $ 4,960

D) $12,360

38) Under accounting standards for private enterprises, what exchange rate is used for non-monetary items carried at fair value?

A) The exchange rate at the date the item was ordered

B) The exchange rate at the date the item was received

C) The exchange rate at the date of payment for the item

D) The exchange rate at the statement of financial position date

39) Under accounting standards for private enterprises, which of the following can be used as hedging instruments?

A) Options

B) Forward contracts

C) Futures contracts

D) Currency swaps