Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 19,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 19,000 dinars on March 1, 2021. Relevant exchange rates for the dinar on various dates are as follows: Date December 1, 2020 December 31, 2020 March 1, 2021 Spot Rate $ 3.70 3.89 3.95 Forward Rate (to March 1, 2021) $ 3.775 3.900 N/A a-1. 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 U.S. dollars. a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net Income? 2-4. What is the impact on net income over the two accounting periods? b-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a forelgn currency payable, prepare journal entries for the import purchase and foreign currency forward contract In U.S. dollars. b-2. What is the impact on net income in 2020 and in 2021? b-3. What is the impact on net income over the two accounting periods? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 to A4 Req B1 Req B2 to B3 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 U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Show less No Date General Journal Debit Credit 1 12/01/2020 70,300 Cost of goods sold Accounts payable (dinars) 70.300 2 12/01/2020 No journal entry required 3 12/31/2020 Foreign exchange gain or loss Accounts payable (dinars) 4 4 12/31/2020 Forward contract 2,375 Other comprehensive income 2.375 Reg A1 Reg A2 to A4 Req B1 Reg B2 to B3 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 U.S. dollars. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Do not round intermediate calculations.) Show less No Date General Journal Debit Credit 1 12/01/2020 70.300 Cost of goods sold Accounts payable (dinars) > 70,300 2 12/01/2020 No journal entry required 3 12/31/2020 Foreign exchange gain or loss Accounts payable (dinars) OO 4 12/31/2020 Forward contract 2,375 Other comprehensive income 2.375 5 12/31/2020 1.900 Other comprehensive income Foreign exchange gain or loss 1.000 6 12/31/2020 475 Foreign exchange gain or loss Other comprehensive income Blo 475 7 03/01/2021 Foreign exchange gain or loss Accounts payable (dinars) 8 03/01/2021 Forward contract Other comprehensive income >> 9 03/01/2021 Other comprehensive income > Foreign exchange gain or loss 10 03/01/2021 Foreign exchange gain or loss Other comprehensive income 11 03/01/2021 Foreign currency (dinars) Forward contract Blo 12 03/01/2021 Accounts payable (dinars) Foreign currency (dinars) O
