10 slickton corporation a u s holding company enters into a forward contract on nove 4307475

10 slickton corporation a u s holding company enters into a forward contract on nove 4307475

10) Slickton Corporation, a U.S. holding company, enters into a forward contract on November 1, 2011 to speculate in Singapore dollars (S$). The forward contract requires Slickton to sell 1,000,000 Singapore dollars to the exchange broker on January 30, 2012. Net settlement is not permitted. Relevant exchange rates for the Singapore dollar are listed below:

11/1/11

12/31/11

1/30/12

Spot rate

$0.806

$0.797

$0.802

30-day forward rate

$0.805

$0.792

$0.796

90-day forward rate

$0.804

$0.795

$0.789

Required:

Prepare the journal entries required by Slickton on November 1, 2011, December 31, 2011 (year end), and January 30, 2012.

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