Forward exchange contract designated as a fair value hedge of a foreign-currency-denominated firm commitment to sell inventory, weakening $US Our U.S.-based company enters into a firm commitment with Malta-based retailer on November 10, 2018. The firm commitment requires our company to sell 70,000 units of an inventory item costing 9.00 each to the Maltese company. Our company is contractually committed to ship the inventory (i.e., title transfers) on February 10, 2019, with payment in Euros on the same date. Our company does recurring business with the Maltese company, and the firm commitment includes significant monetary penalties for nonperformance. Also assume, on November 10, 2018, our company enters into a contract with a foreign currency exchange broker to sell Euros (for settlement on February 10, 2019) to mitigate the risk of exchange rate fluctuation. Our companys functional currency is the U.S. dollar and our forward exchange contract qualifies as a fair value hedge. The relevant exchange rates and related balances for the period from November 10, 2018, to February 10, 2019, are as follows:

				DerivativeForward
Date	Spot Rate ($US = 1)	Sale Transaction	Forward Ratea ($US = 1)	FV Asset (Liability)b	Change in FV
November 10, 2018	1.18		1.20
December 31, 2018	1.22		1.25	$(31,500)	$(31,500)
February 10, 2019	1.27	$800,100	1.27	(44,100)	(12,600)

^a For settlement on February 10, 2019

^b Ignore discounting in the computation of fair values.

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What is the total amount of sales recognized across the quarters ending December 31, 2018, and March 31, 2019?

0 0 0 a. Prepare the journal entries to record the sale and all adjustments required for the firm commitment and forward contract at November 10, 2018, December 31, 2018, and February 10, 2019. Note: If no entry is required, select "No entry" as your answers under Description and leave the debit and credit answers blank (zero). Hedged Transaction Date Description Debit Credit 11/10/18 No entry 0 0 No entry 0 0 12/31/18 Hedged firm commitment (asset) 31,500 0 Sales 0 31,500 2/10/19 Cash 800,100 0 Sales 0 800,100 To record sale of inventory. Hedged firm commitment (asset) 12,600 0 Sales 0 12,600 To record change in value. Sales 44,100 0 O Hedged firm commitment (asset) 0 44,100 To reclassify firm commitment. Credit Debit 0 07 0 0 0 0 FV Hedge Date Description 11/10/18 No entry No entry 12/31/18 Sales Forward contract liability) 2/10/19 Sales Forward contract (liability) To record change in value. Forward contract liability) Cash To record the net settlement. 31,500 0 0 12,600 0 31,500 0 12,600 44,100 0 0 0 44,100