A U.S. company issues a purchase order on April 1 to buy merchandise from an Australian supplier for A$100,000, to be paid on August 1. To hedge the foreign exchange risk, on April 1 the U.S. company enters a forward purchase contract for A$100,000 with an August 1 delivery date. On May 1, the company takes delivery of the merchandise. On August 1 the company purchases the Australian dollars through the forward contract and pays the supplier. On August 15, the company sells the merchandise to a U.S. customer for $95,000 in cash. Assume the company records cost of goods sold when the sale is made. The company’s fiscal year ends June 30. Relevant rates ($/A$) are as follows: 

Spot Rate Forward Rate for 

August 1 Delivery 

April 1                                              $0.776              $ 0.774 

May 1                                                0.772                 0.770 

June 30                                             0.765                 0.762

 August 1                                          0.778                0.778

(Required)

Make the journal entries to record the above events, including appropriate fiscal year-end adjusting entries. Display your calculations for each journal entry.