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On October 5, 2017, Kappa Cloth Ltd

Question 51

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On October 5, 2017, Kappa Cloth Ltd.enters into a forward contract to purchase 10,000 metres of cotton fabric at $1 per metre, good until February 1, 2018.At December 31, 2017, the forward price for February 2018 delivery of cotton fabric has increased to $1.04 per metre.The adjusting entry at December 31, 2017 would be On October 5, 2017, Kappa Cloth Ltd.enters into a forward contract to purchase 10,000 metres of cotton fabric at $1 per metre, good until February 1, 2018.At December 31, 2017, the forward price for February 2018 delivery of cotton fabric has increased to $1.04 per metre.The adjusting entry at December 31, 2017 would be

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