LO2 44. Forward exchange contract designated as a cash flow hedge of a foreign-currency-denominated forecasted sale of inventory, weakening $US On November 20, 2018, our U.S.-based company received a cancelable purchase order from a Greece- based retailer. The purchase order states that our company will sell to the Greek company, on February 20, 2019, 45,000 units of an inventory item with a sales price of 12.00 each. The purchase order also specifies that the Greek company will make payment in Euros on that same date. Our company does recurring business with the Greek company; however, the cancelable purchase order includes no mon- etary penalties for nonperformance. Also, on November 20, 2018, our company entered into a contract with a foreign currency exchange broker to sell 540,000 (for settlement on February 20, 2019) to mitigate the risk of exchange rate fluctuation from this forecasted sale. We will receive $1.19 per 1, which is the forward rate on November 20, 2018, for settlement on February 20, 2019. Our company's functional currency is the $US and our forward exchange contract qualifies as a cash flow hedge. The relevant exchange rates and related balances for the period from November 20, 2018, to February 20, 2019, are as follows: Date November 20, 2018. December 31, 2018. February 20, 2019 a For settlement on February 20, 2019 Derivative-Forward Spot Rate Forecasted Sale Forward ($US = 1) Transaction Ratea ($US = 1) (Liability)b FV Asset Change in FV 1.16 1.19 1.19 1.22 $(16,200) $(16,200) 1.24 $669,600 1.24 (27,000) (10,800) b Ignore discounting in the computation of fair values. a. Prepare the journal entries to record the sale and all adjustments required for the forecasted sale and forward contract at November 20, 2018, December 31, 2018, and February 20, 2019. b. Reconcile to the forward rate at the forward contract's inception the net cash received for both the sale of goods and the settlement of the forward-contract derivative. C. What amount of sales was recognized in the quarter ending December 31, 2018? What amount of sales was recognized in the quarter ending March 31, 2019? Explain these amounts. What is the total amount of sales recognized across the quarters ending December 31, 2018, and March 31, 2019? Reconcile this total to your answer to part b