Please help me solving the below question, and please write down the explanation as to how you got the answers. The below entries need to fill up with the calculations. Thank you.
Icebreaker Company (a U.S.-based company) purchases materials from a foreign supplier on December 1, 2020, with payment of 30,000 dinars to be made on March 1, 2021. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2020, Icebreaker enters into a forward contract to purchase 30,000 dinars on March 1, 2021.
Relevant exchange rates for the dinar on various dates are as follows:
| Date | Spot Rate | Forward Rate (to March 1, 2021) |
| December 1, 2020 | $ | 4.80 | | $ | 4.875 | |
| December 31, 2020 | | 4.90 | | | 5.000 | |
| March 1, 2021 | | 5.05 | | | N/A | |
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a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars.
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a-2. What is the impact on 2020 net income?
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a-3. What is the impact on 2021 net income?
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a-4. What is the impact on net income over the two accounting periods?
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b-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars.
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b-2. What is the impact on net income in 2020 and in 2021?
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b-3. What is the impact on net income over the two accounting periods?
No Date General Journal Debit Credit 1 12/01/2020 0 Cost of goods sold Accounts payable (dinars) 2 12/01/2020 > No journal entry required 3 12/31/2020 Foreign exchange gain or loss Accounts payable (dinars) OO 4 12/31/2020 Forward contract > Other comprehensive income 5 12/31/2020 Other comprehensive income Foreign exchange gain or loss >> 6 12/31/2020 Foreign exchange gain or loss Other comprehensive income Olo 7 03/01/2021 Foreign exchange gain or loss Accounts payable (dinars) OO 8 03/01/2021 Forward contract Other comprehensive income 9 03/01/2021 Other comprehensive income Foreign exchange gain or loss Oo 10 > 03/01/2021 Foreign exchange gain or loss Other comprehensive income 11 03/01/2021 Foreign currency (dinars) Cash > 12 03/01/2021 Accounts payable (dinars) >> Foreign currency (dinars) a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods? (Do not round intermediate calculations. Negative amounts should be entered with a minus sign.) a- 2 a- Impact on 2020 net income Impact on 2021 net income Impact on net income over 2020 and 2021 a- 4. No Date General Journal Debit Credit 1 12/01/2020 Cost of goods sold Accounts payable (dinars) 2 12/01/2020 No journal entry required 3 12/31/2020 Foreign exchange gain or loss Accounts payable (dinars) 4 12/31/2020 Forward contract Foreign exchange gain or loss 5 12/31/2020 No journal entry required 6 12/31/2020 Foreign exchange gain or loss Other comprehensive income 7 03/01/2021 Foreign exchange gain or loss Accounts payable (dinars) 8 03/01/2021 Forward contract Foreign exchange gain or loss 9 03/01/2021 No journal entry required 10 03/01/2021 Accumulated other comprehensive income Foreign exchange gain or loss 11 03/01/2021 Foreign currency (dinars) Cash 12 03/01/2021 Accounts payable (dinars) Foreign currency (dinars) Req A1 Req A2 to 44 Req B1 Req B2 to B3 b-2. What is the impact on net income in 2020 and in 2021? b-3. What is the impact on net income over the two accounting periods? (Do not round intermediate calculations. Negative amounts should be entered with a minus sign.) 2. Impact on 2020 net income Impact on 2021 net income Impact on net income over 2020 and 2021 b- 3. No Date General Journal Debit Credit 1 12/01/2020 0 Cost of goods sold Accounts payable (dinars) 2 12/01/2020 > No journal entry required 3 12/31/2020 Foreign exchange gain or loss Accounts payable (dinars) OO 4 12/31/2020 Forward contract > Other comprehensive income 5 12/31/2020 Other comprehensive income Foreign exchange gain or loss >> 6 12/31/2020 Foreign exchange gain or loss Other comprehensive income Olo 7 03/01/2021 Foreign exchange gain or loss Accounts payable (dinars) OO 8 03/01/2021 Forward contract Other comprehensive income 9 03/01/2021 Other comprehensive income Foreign exchange gain or loss Oo 10 > 03/01/2021 Foreign exchange gain or loss Other comprehensive income 11 03/01/2021 Foreign currency (dinars) Cash > 12 03/01/2021 Accounts payable (dinars) >> Foreign currency (dinars) a-2. What is the impact on 2020 net income? a-3. What is the impact on 2021 net income? a-4. What is the impact on net income over the two accounting periods? (Do not round intermediate calculations. Negative amounts should be entered with a minus sign.) a- 2 a- Impact on 2020 net income Impact on 2021 net income Impact on net income over 2020 and 2021 a- 4. No Date General Journal Debit Credit 1 12/01/2020 Cost of goods sold Accounts payable (dinars) 2 12/01/2020 No journal entry required 3 12/31/2020 Foreign exchange gain or loss Accounts payable (dinars) 4 12/31/2020 Forward contract Foreign exchange gain or loss 5 12/31/2020 No journal entry required 6 12/31/2020 Foreign exchange gain or loss Other comprehensive income 7 03/01/2021 Foreign exchange gain or loss Accounts payable (dinars) 8 03/01/2021 Forward contract Foreign exchange gain or loss 9 03/01/2021 No journal entry required 10 03/01/2021 Accumulated other comprehensive income Foreign exchange gain or loss 11 03/01/2021 Foreign currency (dinars) Cash 12 03/01/2021 Accounts payable (dinars) Foreign currency (dinars) Req A1 Req A2 to 44 Req B1 Req B2 to B3 b-2. What is the impact on net income in 2020 and in 2021? b-3. What is the impact on net income over the two accounting periods? (Do not round intermediate calculations. Negative amounts should be entered with a minus sign.) 2. Impact on 2020 net income Impact on 2021 net income Impact on net income over 2020 and 2021 b- 3
