1. The Alexandria Company (based in the US) sells merchandise to a foreign customer (based in UAE) on December 1, 2016, with payment of 200,000 dirhams to be received on March 31, 2017. Alexandria enters into forward contract on December 1, 2016, to sell 150,000 dirhams on March 1, 2017. The Relevant exchange rates, US dollar value of the dirhams receivable, and fair value of the forward contract are as follows:

Account Receivable				Forward Contract
Date	Spot Rate	US Dollar Value	Change in US Dollar Value		Forward Rate to 3/1/2017	Fair Value	Change in Fair Value
12/1/2016	$0.27	$54,000	-		$0.255 ? ?
12/31/2016	$0.30	$60,000	+$6,000		$0.265 ? ?
3/1/2017	$0.25	$50,000	-$10,000		$0.250 ? ?

1. Prepare journal entries on December 1, 2016 to record for the sales

2. Prepare journal entries on December 31, 2016 to adjust the value of accounts receivable, to record forward contract as assets or liabilities at fair value, to record gain/loss on forward contract, and to record the allocation of forward contract discount: Straight-line method is used to allocate discount expense.

3. What is the impact on net income on December 31, 2016:

4. What is the impact on balance sheet on December 31, 2016

5. Prepare journal entries on March 1, 2017 to adjust the value of accounts receivable, to adjust the carrying value of the forward contract to its current fair value, to record gain/loss on forward contract, and to record the allocation of forward contract discount:

6. Prepare journal entries on March 1, 2017 to record the payment received from foreign customer and to record settlement of the forward contract:

7. What is the impact on net income on March 1, 2017