Part Two: This portion of the case is due to be uploaded on VIU Learn by April $12$ by

$11$:$59$ pm$.$

David provided details around the company's largest US sale in the year and the relevant

exchange rates $($Exhibit III$).$ He also noted that they had considered using a forward contract

but ultimately chose not to$.$

After a bit of research, you determined that the following rates were applicable to a forward

contract to sell $$1,250,000$ U$.$S$.$ settling on December $15,2023$ :

In $2023,$ SSM had a large order from a U$.$S$.$ client which resulted in a foreign exchange loss.

We had considered entering into a forward currency contract but we were not confident that we

knew what we were doing and so opted not to use one. We are wondering if that was a mistake

on our part. We anticipate that our U$.$S$.$ sales will increase considerably over the next few

years. Our goal is to have consistent sales in the U$.$S$.$ by $2026$ but for now we expect to

continue to have sporadic sales over the next few years as we build our reputation in the United

States. I am concerned with the loss we experienced on the foreign exchange and hope you

can provide us with some advice on how we can manage the risk both now and when the U$.$S$.$

sales become more consistent.

SSM does not have a U$.$S$.$ denominated bank account so all foreign source cash is converted to

Canadian dollars immediately. Here is some information related to the sale that occurred in

$2023$: REQUIRED$-$ Prepare the journal entries required to record these events assuming David does not designate the forward contract as part of a hedging arrangement.