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Brandiin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 23,000 korunas to be received on March
Brandiin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 23,000 korunas to be received on March 1, 2018. Brandlin enters into a forward contract on December 1, 2017, to sell 23,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows: Date December 1, 2017 December 31, 2017 March 1, 2018 Spot Rate $ 4.10 4.20 4.35 Forward Rate (to March 1, 2018) $4.175 4.300 N/A Brandin's incremental borrowing rate is 9 percent. The present value factor for two months at an annual interest rate of 9 percent (0.75 percent per month is 0.9852. Brandiin must close its books and prepare financial statements at December 31 -1. Assuming that Brandiin designates the forward contract as a cash flow hedge of a foreign currency receivable and recognizes any premium or discount using the straight-line method, prepare Journal entries for these transactions in US dollars. -2. What is the impact on 2017 net income? -3. What is the impact on 2018 net income? -4. What is the impact on net income over the two accounting periods? b-1. Assuming that Brandlin designates the forward contract as a fair value hedge of a foreign currency receivable, prepare Journal entries for these transactions in US dollars. -2. What is the impact on 2017 net income? - What is the impact on 2018 net income? 14. What is the impact on net income over the two accounting periods? Reg A1 Reg A2 to A4 Req B1 Req B2 to 14 Assuming that Brandlin designates the forward contract as a cash flow hedge of a foreign currency receivable and recognizes any premium or discount using the straight-line method, prepare journal entries for these transactions in U.S. dollars. (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 2 decimal places.) Show less View transaction list Journal entry worksheet Record the sales and foreign currency account receivable. Note: Enter debits before credits. General Journal Debit 12/01/2017 Record entry Clear entry View general Journal Reg A1 Reg A2 to A4 Req B1 Req B2 to B4 -2. What is the impact on 2017 net income? a-3. What is the impact on 2018 net income? 3-4. What is the impact on net income over the two accounting periods? (Do not round intermediate calculations.) Show less -2. Impact on 2017 net income 2-3. Impact on 2018 net income 2-4. Impact on net income over 2017 and 2018 Complete this question by entering your answers in the tabs below. Req A1 Req A2 to A4 Req B1 Req B2 to B4 Assuming that Brandlin designates the forward contract as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars. (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 2 decimal places.) Show less View transaction list Journal entry worksheet Record the sales and foreign currency account receivable. Note: Enter debits before credits Date General Journal Debit Credit 12/01/2017 Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Reg B1 Req B2 to 34 Req A1 Reg A2 to A4 b 2. What is the impact on 2017 net income? b-3. What is the impact on 2018 net income? 1-4. What is the impact on net income over the two accounting periods? (Do not round Intermediate calculations. Round your final answers to 2 decimal places) Show less 2. D-3 14 Impact on 2017 net income impact on 2018 net income Impact on net income over 2017 and 2018
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