HD Company sells goods to a Spanish customer at a price of 1 million euros. HD shipped good to its customer on December 1, Year1.The payment was received on March 1, Year2.On December 1, Year1, HD signs a contract with First National Bank to deliver 1,000,000 euros in three months in exchange for $1,485,000

Date

sport rate

forward rate

12/1/Year1

$1.600

$1.485

12/31/Year1

$1.700

$1.520

3/1/Year2

$1.500

$1.500

1. HD designates the forward contract as a cash flow hedge. What is the ending balance of accumulated other comprehensive income at the end of Year1?
2. HD designates the forward contract as a cash flow hedge. What is the ending balance of accounts receivable at the end of Year1?
3. HD designates the forward contract as a fair value hedge. What is the net impact on Year 1 net income?