A yen was worth $.38 at the spot rate. It is necessary to report the inventory at $42,750.
On an interest rate, a commodity, a security, or a currency, the spot rate is the quoted price for immediate settlement. The current market value of an asset that is available for immediate delivery at the time of the quote is known as the spot rate, commonly referred to as the "spot price."
The discount rate that brings a zero-coupon bond's present value (PV) and price to the same value is used to determine the spot rate. These have been developed using projections for future interest rates.
Purchases= 112,500 yen
Spot rate= $0.38
amount= 112,500 X 0.38= $42,750
The complete question is : g signed a one-month forward contract on that date to purchase 112,500 yen at a forward rate of $.36 per yen. the inventory was received on December 15 and the payment was made. the spot rate was $.38 per yen. at what amount should inventory be reported?
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