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Icebreaker Company ( a U . S . - based company ) purchases materials from a foreign supplier on December 1 , 2 0 2
Icebreaker Company a USbased company purchases materials from a foreign supplier on December with payment of dinars to be made on March The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December Icebreaker enters into a forward contract to purchase dinars on March Relevant exchange rates for the dinar on various dates are as follows: a Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in US dollars. a What is the impact on net income? a What is the impact on net income? a What is the impact on net income over the two accounting periods? b Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in US dollars. b What is the impact on net income in and in b What is the impact on net income over the two accounting periods? Complete this question by entering your answers in the tabs below. b What is the impact on net income in and in What is the impact on net income over the two accounting periods? Do not round intermediate calculations. Negative amounts should be entered with a minus sign. Show less
Icebreaker Company a USbased company purchases materials from a foreign supplier on December with
payment of dinars to be made on March The materials are consumed immediately and recognized as
cost of goods sold at the date of purchase. On December Icebreaker enters into a forward contract to
purchase dinars on March
Relevant exchange rates for the dinar on various dates are as follows:
a Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable,
prepare journal entries for the import purchase and foreign currency forward contract in US dollars.
a What is the impact on net income?
a What is the impact on net income?
a What is the impact on net income over the two accounting periods?
b Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable,
prepare journal entries for the import purchase and foreign currency forward contract in US dollars.
b What is the impact on net income in and in
b What is the impact on net income over the two accounting periods?
Complete this question by entering your answers in the tabs below.
b What is the impact on net income in and in
What is the impact on net income over the two accounting periods?
Do not round intermediate calculations. Negative amounts should be entered with a minus
sign.
Show less
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