HouTube Maps Translate News Chrome Web Store M Gmail YouTube Maps Translate News Chrom Question 1 - Foreign Currency Transactions (34 Marks) On August 1, Year 3, Carleton Ltd. ordered machinery from a supplier in Hong Kong for HKD500,000. The machinery was delivered on October 1, Year 3, with terms requiring payment in full by December 31, Year 3. On August 2, Year 3, Carleton entered a forward contract to purchase HKD500,000 on December 31, Year 3, at a rate of $0.165. On December 31, Year 3, Carleton settled the forward contract and paid the supplier Exchange rates were as follows: FR August 1 and 2. Year) HKSI-C$0.160 HKSI - 10.165 October 1. Year) HKSI - C.168 December Jl. Year) Required: Part A (17 Marks): Assume the forward contract was designated as a cash flow hedge of the firm commitment to purchase the machinery, and that the balance in accumulated other comprehensive income on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Part B (17 Marks) Part A (17 Marks): Assume the forward contract was designated as a cash flow hedge of the firm commitment to purchase the machinery, and that the balance in accumulated other comprehensive income on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Part B (17 Marks) Assume the forward contract was designated as a fair value hedge of the firm commitment to purchase the machinery, and that the balance in the commitment asset/liability account on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Question 1 - Foreign Currency Transactions (34 Marks) On August 1, Year 3, Carleton Ltd. ordered machinery from a supplier in Hong Kong for HKD500,000. The machinery was delivered on October 1, Year 3, with terms requiring payment in full by December 31, Year 3. On August 2, Year 3, Carleton entered a forward contract to purchase HKD500,000 on December 31, Year 3, at a rate of $0.165. On December 31, Year 3, Carleton settled the forward contract and paid the supplier. Exchange rates were as follows: Spor Rates Fornard Rates August 1 and 2. Year 3 HK$I - C$0.160 HK$1 - C$0.165 October 1. Year 3 HKSI - C$0.164 HKSTC50.163 December 31. Year 3 HK$i - C$0.169 HKSI - C$0.169 Required: Part A (17 Marks): Assume the forward contract was designated as a cash flow hedge of the firm commitment to purchase the machinery, and that the balance in accumulated other comprehensive income on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Part B (17 Marks) Assume the forward contract was designated as a fair value hedge of the firm commitment to purchase the machinery, and that the balance in the commitment asset/liability account on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. HouTube Maps Translate News Chrome Web Store M Gmail YouTube Maps Translate News Chrom Question 1 - Foreign Currency Transactions (34 Marks) On August 1, Year 3, Carleton Ltd. ordered machinery from a supplier in Hong Kong for HKD500,000. The machinery was delivered on October 1, Year 3, with terms requiring payment in full by December 31, Year 3. On August 2, Year 3, Carleton entered a forward contract to purchase HKD500,000 on December 31, Year 3, at a rate of $0.165. On December 31, Year 3, Carleton settled the forward contract and paid the supplier Exchange rates were as follows: FR August 1 and 2. Year) HKSI-C$0.160 HKSI - 10.165 October 1. Year) HKSI - C.168 December Jl. Year) Required: Part A (17 Marks): Assume the forward contract was designated as a cash flow hedge of the firm commitment to purchase the machinery, and that the balance in accumulated other comprehensive income on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Part B (17 Marks) Part A (17 Marks): Assume the forward contract was designated as a cash flow hedge of the firm commitment to purchase the machinery, and that the balance in accumulated other comprehensive income on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Part B (17 Marks) Assume the forward contract was designated as a fair value hedge of the firm commitment to purchase the machinery, and that the balance in the commitment asset/liability account on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Question 1 - Foreign Currency Transactions (34 Marks) On August 1, Year 3, Carleton Ltd. ordered machinery from a supplier in Hong Kong for HKD500,000. The machinery was delivered on October 1, Year 3, with terms requiring payment in full by December 31, Year 3. On August 2, Year 3, Carleton entered a forward contract to purchase HKD500,000 on December 31, Year 3, at a rate of $0.165. On December 31, Year 3, Carleton settled the forward contract and paid the supplier. Exchange rates were as follows: Spor Rates Fornard Rates August 1 and 2. Year 3 HK$I - C$0.160 HK$1 - C$0.165 October 1. Year 3 HKSI - C$0.164 HKSTC50.163 December 31. Year 3 HK$i - C$0.169 HKSI - C$0.169 Required: Part A (17 Marks): Assume the forward contract was designated as a cash flow hedge of the firm commitment to purchase the machinery, and that the balance in accumulated other comprehensive income on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above. Part B (17 Marks) Assume the forward contract was designated as a fair value hedge of the firm commitment to purchase the machinery, and that the balance in the commitment asset/liability account on October 1 was transferred to the machinery account when the machinery was delivered. Prepare the journal entries for Year 3 to record all the activity described above