On October 15, 2018, our company sells to a retailer located in Austria 12,000 units of a product at a sales price of 35 per unit, and we require payment in Euros (). The exchange rate on the date of sale is $1.25:1, and the due date for payment is January 15, 2019. To mitigate the risk of exchange rate fluctuations between the sale date and the collection date, on October 15, 2018, our company enters into a forward contract with an exchange broker. The contract obligates our company to deliver 420,000 on January 15, 2019, while we lock in the $US we will receive on that date at the forward rate of $1.29:1 (i.e., the forward rate on October 15, 2018 for settlement on January 15, 2019). Assume this derivative qualifies as a fair value hedge, and our companys functional currency and reporting currency is the $US. The following table includes the spot rates, forward rates, and related values of the accounts receivable and forward contract on October 15, 2018, December 31, 2018, and January 15, 2019. When computing fair values, ignore discounting.
9.00 Forward exchange contract designated as a fair value hedge of a foreign currency denominated accounts receivable, weakening SUS On October 15, 2018, our company store located in a 12.000 unts of a productie prices petunt, and we require payment in Euros The exchange rate on the date of 5125CI, and the due date for payment is acary 15 2019. Tome the risk of change rate fluctuations between the sale date and the collection date, on October 15, 2018, our company enter into forward contact with an exchange broker. The contract obligates our company to deliver 420.000 on January 15, 2013, while we lock in the bus we will receive on that at the forward rate of chile the forward rate on October 15, 2015 for set on January 15, 2019 sure there is as fave bed and our company functional currency and reporting currency is thus the following table indudes the spot rates forward rates, and related values of the accounts receivable and forward contract on October 15, 2018 December 31, 2018 and January 15 2018. When computing for Values ignore discounting FC Acants Receivable Durative forward Forward Spot Ruta Carrying Change in Race Anel Charge Value Carry Val US-CU INV Der 1, 2018 12 2018 Sh200 1200 11 May 2010 10 12.00 For settlement on January 15, 2019 more counting in the computation of fair values Proare the journal entries to record the sale and adjustments required for the accounts receivable and forward contact at October 15, 2011 December 2018, anuary 15, 2010 Note: no entry is required select "No entry your answers under Description and leave the debit and credit werd blanker Hedged Transaction Date Description Delt Credit be 100 Hedged Transaction Debit Credit Date Description 10/15/18 Accounts payable . > 1/15/19 > To record change in value. To record the net settlement. b. Reconcile to the forward rate at the forward contract's inception the net cash received for both the settlement of the receivable and the settlement of the forward-contract det Net cash received from settlement of the receivable and forward-contract derivatives 5 What amount of sales was recognized in the quarter ending December 31, 2018 5 What amount of sales was recognized in the quarter ending March 31, 20197 What is the total amount of sales recognized across the quarters ending December 31, 2018 and March 31, 2019? 9.00 Forward exchange contract designated as a fair value hedge of a foreign currency denominated accounts receivable, weakening SUS On October 15, 2018, our company store located in a 12.000 unts of a productie prices petunt, and we require payment in Euros The exchange rate on the date of 5125CI, and the due date for payment is acary 15 2019. Tome the risk of change rate fluctuations between the sale date and the collection date, on October 15, 2018, our company enter into forward contact with an exchange broker. The contract obligates our company to deliver 420.000 on January 15, 2013, while we lock in the bus we will receive on that at the forward rate of chile the forward rate on October 15, 2015 for set on January 15, 2019 sure there is as fave bed and our company functional currency and reporting currency is thus the following table indudes the spot rates forward rates, and related values of the accounts receivable and forward contract on October 15, 2018 December 31, 2018 and January 15 2018. When computing for Values ignore discounting FC Acants Receivable Durative forward Forward Spot Ruta Carrying Change in Race Anel Charge Value Carry Val US-CU INV Der 1, 2018 12 2018 Sh200 1200 11 May 2010 10 12.00 For settlement on January 15, 2019 more counting in the computation of fair values Proare the journal entries to record the sale and adjustments required for the accounts receivable and forward contact at October 15, 2011 December 2018, anuary 15, 2010 Note: no entry is required select "No entry your answers under Description and leave the debit and credit werd blanker Hedged Transaction Date Description Delt Credit be 100 Hedged Transaction Debit Credit Date Description 10/15/18 Accounts payable . > 1/15/19 > To record change in value. To record the net settlement. b. Reconcile to the forward rate at the forward contract's inception the net cash received for both the settlement of the receivable and the settlement of the forward-contract det Net cash received from settlement of the receivable and forward-contract derivatives 5 What amount of sales was recognized in the quarter ending December 31, 2018 5 What amount of sales was recognized in the quarter ending March 31, 20197 What is the total amount of sales recognized across the quarters ending December 31, 2018 and March 31, 2019
