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Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the worid. On December 1, Year 5, MEI sold 10,000 carvings to a wholesaler in

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Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the worid. On December 1, Year 5, MEI sold 10,000 carvings to a wholesaler in a foreign country at a selling price of 800,000 foreign currency units (FC) when the spot rate was FC1 =$0.701. The involce required the forelgn wholesaler to remit by April 1, Year 6. On December 3, Year 5, MEI entered into a forward contract with the Royal Bank to seil FC800,000 at the 120 -day forward rate of FC1=$0.741 when the spot rate was still FC1=$0.701. Hedge accounting is not applied. The fiscal yearend of MEI is December 31, and on this date the spot rate was FCl=$0.737 and the forward rate was FCl=$0.752. The payment from the foreign customer was recelved on April 1, Year 6 , when the spot rate was FC1 $0.802. Required: (a) Prepare the journal entries to record (in cases where no entry is required, please select the option "No journal entry required" foryour answer to grade correctly, Leave no cells blank - be certain to enter "O" wherevor requiced) (i) The sale and forward controcts on December 1 and 3 , Year 5 (ii) Any adjustments required on December 31 (ii) The cash received and settlement of the contracts in Year 6 (iii) The cash recelved and settlement of the contracts in Year 6 (b) contract at Dime that a discount rate of 6% per annum, or 0.5% (b) Now assume that a discount rate of 6% per annum, or 0.5% per month, is applied when determining the fair value of the forward contract at December 31, Year 5. Prepare the journal entries to record (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. In cases where no entry is required, please select the option "No joumal entry required" for your answer to grade correctly, Leave no cells blank - be certain to enter "O" wherever required.) (i) The sale and forward contracts on December 1 and 3. Year 5 (iv) any acjustments required on December 31 (iil) The cash recelved and settlement of the contracts in Year 6

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