Problem 2:

A U.S. company buys merchandise from a Singapore supplier on May 1 for S$100,000. The U.S. company receives the merchandise on May 1 and pays the bill on August 1. To hedge foreign exchange risk, on May 1 the U.S. company enters a forward purchase contract for S$100,000 with an August 1 delivery date. On August 1 the company purchases the Singapore dollars through the forward contract and pays the supplier. On August 15 the company sells the merchandise to a U.S. customer for $90,000 in cash. Assume the company records cost of goods sold when the sale is made. The companys fiscal year ends June 30. Relevant rates ($/S$) are as follows:

	Spot Rate	Forward Rate for August 1 Delivery
May 1	$0.758	$0.759
June 30	0.767	0.770
August 1	0.773	0.773

Required

Make the journal entries to record the above events (May 1, June 30, August 1, and August 15), including appropriate fiscal year-end adjusting entries.