exercise 129 Marin Golf Co. uses titanium in the production of its specialty drivers. Marin anticipates that it will need to purchase 430 ounces of titanium in November 2020, for clubs that will be sold in advance of the spring and summer of 2021. However, if the price of titanium increases, this will increase the cost to produce the clubs, which will result in lower profit margins. To hedge the risk of increased titanium prices, on May 1, 2020, Marin enters into a titanium futures contract and designates this futures contract as a cash flow hedge of the anticipated titanium purchase. The notional amount of the contract is 430 ounces, and the terms of the contract give Marin the right and obligation to purchase titanium at a price of $1,075 per ounce. The price will be good until the contract expires on November 30, 2020. Assume the following data with respect to the price of the futures contract and the titanium inventory purchase. Date May 1, 2020 June 30, 2020 September 30, 2020 Spot Price for November Delivery $1,075 per ounce 1,118 per ounce 1,129 per ounce Present the journal entries for the following dates/transactions. (a) May 1, 2020-Inception of futures contract, no premium paid. (b) June 30, 2020-Marin prepares financial statements. (c) September 30, 2020-Marin prepares financial statements. (d) October 5, 2020-Marin purchases 430 ounces of titanium at $1,129 per ounce and settles the futures contract. (e) December 15, 2020-Marin sells clubs containing titanium purchased in October 2020 for $275,000. The cost of the finished goods inventory is $146,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Date Account Titles and Explanation Debit Credit (b) (To record purchase.) (To record settlement of futures contract.) (To record sales.) (To record cost of goods sold.) (To record change in earnings.) (f) Indicate the amount(s) reported in the income statement related to the futures contract and the inventory transactions on December 31, 2020. MARIN GOLF CO. Partial Income Statement Sales revenues Cost of goods sold Gross profit