Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied: Assuming a forward contract was entered into on December 16, how would the forward contract be reflected on Jackson's December 31, 2021 balance sheet?
A) Forward contract (asset).
B) Forward contract (liability).
C) Foreign currency (asset).
D) Foreign currency (liability).
E) Foreign exchange (liability).

Question

Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:  Assuming a forward contract was entered into on December 16, how would the forward contract be reflected on Jackson's December 31, 2021 balance sheet?
A) Forward contract (asset). 
B) Forward contract (liability). 
C) Foreign currency (asset). 
D) Foreign currency (liability). 
E) Foreign exchange (liability).

Quizplus · Accepted Answer

The Answer of Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:  Assuming a forward contract was entered into on December 16, how would the forward contract be reflected on Jackson's December 31, 2021 balance sheet?
A) Forward contract (asset). 
B) Forward contract (liability). 
C) Foreign currency (asset). 
D) Foreign currency (liability). 
E) Foreign exchange (liability).