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David provided details around the company s largest US sale in the year and the relevant exchange rates ( Exhibit III ) . He also

David provided details around the companys largest US sale in the year and the relevant exchange rates (Exhibit III). He also noted that they had considered using a forward contract but ultimately chose not to.
After a bit of research, you determined that the following rates were applicable to a forward contract to sell $1,250,000 U.S. settling on December 15,2023: Date Forward contract rate
April 1
1.295
November 1
1.28 In 2023, SSM had a large order from a U.S. client which resulted in a foreign exchange loss. We had considered entering into a forward currency contract but we were not confident that we knew what we were doing and so opted not to use one. We are wondering if that was a mistake on our part. We anticipate that our U.S. sales will increase considerably over the next few years. Our goal is to have consistent sales in the U.S. by 2026 but for now we expect to continue to have sporadic sales over the next few years as we build our reputation in the United States. I am concerned with the loss we experienced on the foreign exchange and hope you can provide us with some advice on how we can manage the risk both now and when the U.S. sales become more consistent.
SSM does not have a U.S. denominated bank account so all foreign source cash is converted to Canadian dollars immediately. Here is some information related to the sale that occurred in 2023:
Date USD $ Exchange rate CDN $
Sales order received
April 1
$1,500,000
1.34
$2,010,000
Deposit received
April 1
$250,000
1.34
335,000
Product delivered
November 1
$1,500,000
1.30
1,950,000
Balance of payment received
December 15
$1,250,000
1.27
1,587,500 REQUIRED- Prepare all the journal entry assuming that David has designated the forward contract as a hedge of the sale.

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