A company is doing business with a German entity and, as a result, has entered into a forward exchange contract on December 18, year 2, under which it will purchase 300,000 Euros on February 18, year 3. Relevant exchange rates are as follows: Spot rate Forward rate for 2/18, year 3 November 18, year 2 $1.27 $1.30 December 18, year 2 1.32 1.25 December 31, year 2 1.35 1.31 February 18, year 3 1.37 The company purchased printing supplies from a German supplier on November 18, year 2, on 90 day terms, and is required to pay 300,000 Euros on February 18, year 3. When the exchange rate increased on December 18, the company decided to enter into the forward exchange contract, which was not designated as a hedge. What amount of foreign currency gain or loss should be recognized in income on December 31, year 2

For each of the following users of financial accounting information and managerial accounting information, specify whether the user would primarily use financial accounting information or managerial accounting information or both: 1. sec examiner 2. bookkeeping department 3. division controller 4. external auditor (public accounting firm) 5. loan officer at the company's bank 6. state tax agency auditor 7. board of directors 8. manager of the service department 9. wall street analyst 10. internal auditor 11. potential investors 12, current stockholders 13. reporter from the wall street journal 14. regional division managers

Suppose you win a small lottery and have the choice of two ways to be paid: you can accept the money in a lump sum or in a series of payments over time. if you pick the lump sum, you get $2,950 today. if you pick payments over time, you get three payments: $1,000 today, $1,000 1 year from today, and $1,000 2 years from today. 1) at an interest rate of 6% per year, the winner would be better off accepting the (lump sum / payments over time), since it has the greater present value. 2) at an interest rate of 9% per year, the winner would be better off accepting the (lump sum / payments over time), since it has the greater present value. 3) years after you win the lottery, a friend in another country calls to ask your advice. by wild coincidence, she has just won another lottery with the same payout schemes. she must make a quick decision about whether to collect her money under the lump sum or the payments over time. what is the best advice to give your friend? a) the lump sum is always better. b) the payments over time are always better. c) it will depend on the interest rate; advise her to get a calculator. d) none of these answers is good advice.

Explain how can you avoid conflict by adjusting