Your firm is a U. K.-based importer of bicycles. You have placed an order with an Italian firm for €1,000,000 worth of bicycles. Payment (in euro) is due in 12 months. Use a money market hedge to redenominate this one-year receivable into a pound-denominated receivable with a one-year maturity.
Contract Size Country U. S. $ equiv. Currency per U. S. $
£ 10,000 Britain (pound) $ 1.9600 £ 0.5102 interest APR
12 months forward $ 2.0000 £ 0.5000 rates
€ 10,000 Euro $ 1.5600 € 0.6410 i$ = 1 %
12 months forward $ 1.6000 € 0.6250 i€ = 2 %
SFr. 10,000 Swiss franc $ 0.9200 SFr. 1.0870 i£ = 3 %
12 months forward $ 1.0000 SFr. 1.0000 iSFr. = 4 % The following were computed without rounding. Select the answer closest to yours.
A. £803,721.49
B. €800,000
C. £780,312.13
D. £72,352.94

On january 1, 2017, fisher corporation purchased 40 percent (90,000 shares) of the common stock of bowden, inc. for $980,000 in cash and began to use the equity method for the investment. the price paid represented a $48,000 payment in excess of the book value of fisher's share of bowden's underlying net assets. fisher was willing to make this extra payment because of a recently developed patent held by bowden with a 15-year remaining life. all other assets were considered appropriately valued on bowden's books. bowden declares and pays a $90,000 cash dividend to its stockholders each year on september 15. bowden reported net income of $400,000 in 2017 and $348,000 in 2018. each income figure was earned evenly throughout its respective year. on july 1, 2018, fisher sold 10 percent (22,500 shares) of bowden's outstanding shares for $338,000 in cash. although it sold this interest, fisher maintained the ability to significantly influence bowden's decision-making process. prepare the journal entries for fisher for the years of 2017 and 2018. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field. do not round intermediate calculations. round your final answers to the nearest whole dollar.)