Hull Manufacturing Corp. (HMC), a Canadian company, manufactures instruments used to measure the moisture content of barley and wheat. The company sells primarily to the domestic market, but in Year 3, it developed a small market in Argentina. In Year 4, HMC began purchasing semi-finished components from a supplier in Romania. The management of HMC is concerned about the possible adverse effects of foreign exchange fluctuations. To deal with this matter, all of HMCs foreign-currency-denominated receivables and payables are hedged with contracts with the companys bank. The year-end of HMC is December 31.

The following transactions occurred late in Year 4:

On October 15, Year 4, HMC purchased components from its Romanian supplier for 813,000 Romanian leus (RL). On the same day, HMC entered into a forward contract for RL813,000 at the 60-day forward rate of RL1 = $0.421. The Romanian supplier was paid in full on December 15, Year 4.

On December 1, Year 4, HMC made a shipment to a customer in Argentina. The selling price was 2,513,000 Argentinean pesos (AP), with payment to be received on January 31, Year 5. HMC immediately entered into a forward contract for AP2,513,000 at the two-month forward rate ofAP1 = $0.239.

During this period, the exchange rates were as follows:

	Spot rates	Forward rates
October 15, Year 4	RL1 = $0.408
December 1, Year 4	AP1 = $0.262
December 15, Year 4	RL1 = $0.400
December 31, Year 4	AP1 = $0.246	AP1 = $0.235

Hedge accounting is not adopted.

Required:

(a)

Prepare the Year 4 journal entries to record the transactions described above and any adjusting entries necessary.(In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required.)

Date	General Journal	Debit	Credit
October 15, Year 4	(Click to select)Exchange gains and lossesAccounts receivableReceivable from bankInventoryNo journal entry requiredPurchaseEquipmentNotes receivableLand
	(Click to select)SalesPayable to bankBills payableNo journal entry requiredInterest receivableAccounts payableLoan payableNotes payableExchange gain
	Record the purchase of inventory.
	(Click to select)CashEquipmentReceivable from bankPurchaseAccounts receivableLandNotes receivableNo journal entry requiredInventory
	(Click to select)Interest receivablePayable to bankAccounts payableBills payableSalesLoan payableNo journal entry requiredNotes payableExchange gain
	Record the forward contract.
December 1, Year 4	(Click to select)InventoryExchange lossReceivable from bankLandEquipmentPurchaseNotes receivableAccounts receivableNo journal entry required
	(Click to select)Bills payableLoan payableInterest receivableNotes payableAccounts payableNo journal entry requiredSalesExchange gainBonds
	Record the sales transaction.
	(Click to select)InventoryNo journal entry requiredExchange lossPurchaseLandNotes receivableReceivable from bankEquipmentAccounts receivable
	(Click to select)Payable to bankAccounts payableSalesLoan payableNo journal entry requiredNotes payableExchange gainInterest receivableBills payable
	Record the forward contact.
December 15, Year 4	(Click to select)InventoryPurchaseNotes receivableAccounts payableAccounts receivableNo journal entry requiredEquipmentReceivable from bankLand
	(Click to select)Exchange gains and lossesAccounts payableSalesPayable to bankBills payableLoan payableNotes payableInterest receivableNo journal entry required
	Revalue accounts payable at fair value.
	(Click to select)LandNo journal entry requiredReceivable from bankPurchaseNotes receivableAccounts receivableEquipmentInventoryExchange gains and losses
	(Click to select)Forward contractInterest receivableLoan payableAccounts payableNotes payableExchange gainSalesNo journal entry requiredBills payable
	Revalue forward contract at fair value.
	(Click to select)Notes receivableReceivable from bankAccounts receivablePurchaseLandNo journal entry requiredEquipmentCashInventory
	(Click to select)SalesLoan payableNotes payableInterest receivableNo journal entry requiredBills payableForward contractAccounts payableExchange gain
	(Click to select)SalesExchange gainCashNo journal entry requiredBills payableAccounts payableNotes payableInterest receivableLoan payable
	Record the receipt from bank.
	(Click to select)Receivable from bankLandEquipmentNotes receivableNo journal entry requiredAccounts receivablePurchaseAccounts payableInventory
	(Click to select)CashNotes payableInterest receivableBills payableSalesAccounts payableExchange gainLoan payableNo journal entry required
	Record the payment to accounts payable.
December 31, Year 4	(Click to select)InventoryLandAccounts receivableNotes receivableReceivable from bankEquipmentPurchaseNo journal entry requiredExchange gains and losses
	(Click to select)Interest receivableNotes payableAccounts receivableBills payableExchange gainNo journal entry requiredAccounts payableLoan payableNotes receivable
	Revalue accounts receivable at fair value.
	(Click to select)Accounts receivableNo journal entry requiredLandInventoryNotes receivableForward contractEquipmentPurchaseReceivable from bank
	(Click to select)Bills payablePayable to bankAccounts payableInterest receivableExchange gains and lossesSalesNo journal entry requiredLoan payableNotes payable
	Revalue forward contract at fair value.

(b)	Prepare the December 31, Year 4, balance sheet presentation of the receivable from the Argentinean customer, and the accounts associated with the forward contract.

Hull Manufacturing Corp. Balance Sheet as at December 31, Year 4
Assets
Account receivable		$
Forward contract		$