In class Exercise - Import/export transactions, hedge of receivables and payables Following is information on S/euro exchange rates: Each question below is independent. The U.S. company's accounting year ends December 31. a. A U.S. company sells merchandise to customers in euro countries, with payment to be received in euros. Sales totaling euro 1,000,000 occur on November 1, 2013. Payment is received on March 1, 2014. The company does not hedge. What amounts will appear on the financial statements of the U.S. company for: Sales revenue, 2013 income statement Exchange gain or loss, 2013 Income Statement Accounts receivable. December 31, 2013 balance sheet Exchange gain or loss, 2014 income statement b. A U.S. company takes delivery of merchandise from an Italian supplier on November 1. 2013. Payment of euro 1,000,000 will be made on February 15, 2014. The U.S. company enters a forward contract on November 1, 2013, locking in the purchase price of euro 1,000,000 at $1.40/euro for delivery on February 15, 2014. It closes the forward on February 15 and pays the supplier. The U.S. company sells the merchandise later in 2014. What amounts will appear on the financial statements of the U.S. company for: Investment in forward. December 31, 2013 Cost of goods sold, 2014 income statement