Sale 1.26 1.23 On October 15, 2018, our U.S.-based company received a cancelable purchase order from a Luxembourg-based retailer. The purchase order states that our company will sell to the Luxembourgish company, on February 1, 2019, 70,000 units of a inventory item with a sales price of 11.00 each. The purchase order also specifies that the Luxembourgish company will make payment in Euras on that same date. Our company does recurring business with the Luxembourgish company however, the cancelable purchase order includes no monetary penalties for nonperformance. Also, on October 15, 2018, our company entered into a contract with a foreign currency exchange broker to sell 770,000 (for settlement on February 2019) to mitigate the risk of exchange rate fluctuation from this forecasted sale. We will receive $1.23 per 1, which is the forward rate on October 15, 2018, for settlement on February 1, 2019. Our company's functional currency is the U.S. dollar and our forward exchange contract qualifies as a cash flow hedge. The relevant exchange rates and related balances for the period from October 15, 2018, to February 1, 2019, are as follows: Derivative-Forward Forecasted Forward Spot Rate Rate FV Asset Change Date (SUS=61) Transaction (SUS=C1) (Liability in FV Octaber 15, 2018 December 31, 2018 1.21 1.20 $23.100 $22,100 Fearuary 1, 2019 $916,300 30.800 7,700 For settlement on February 1, 2019 ignore discounting in the computation of fair values. a. Prepare the journal entries to record the sale and all adjustments required for the forecasted sale and forward contract at October 15, 2018 December 31, 2018, and February 1, 2019. Note: If no entry is required, select "No entry" as your answers under Description and leave the debit and credit answers blank (zero). Hedged Transaction Date Description Credit 1.19 1.19 Debit 101/15/12 a a 12/31/18 0 . 0 2/1/19 0 D 0 CF Hedge Date Description Debit Credit 10/15/16 0 0 0 0 12/31/18 + 0 0 0 2/1/19 0 + To record change in value D a a To record the ner screen 0 0 o Ta rccard reclassif caran A 0 0 12/31/18 0 0 0 0 2/1/19 0 0 A 0 0 To record change in value. 0 0 0 0 To record the net settlement. 0 O O 0 To record reclassification. b. Reconcile to the forward rate at the forward contract's inception the net cash received for both the sale of goods and the settlement of the forward-contract derivative. Net cash received for sale of goods and settlement of the forward contract derivative is: $ 0 C. What amount of sales was recognized in the quarter ending December 31, 2018? Note: Do not use a negative sign with any of your answers below. $ 0 What amount of sales was recognized in the quarter ending March 31, 2019? $ 0 What is the total amount of sales recognized across the quarters ending December 31, 2018, and March 31, 2019? $ 0 Sale 1.26 1.23 On October 15, 2018, our U.S.-based company received a cancelable purchase order from a Luxembourg-based retailer. The purchase order states that our company will sell to the Luxembourgish company, on February 1, 2019, 70,000 units of a inventory item with a sales price of 11.00 each. The purchase order also specifies that the Luxembourgish company will make payment in Euras on that same date. Our company does recurring business with the Luxembourgish company however, the cancelable purchase order includes no monetary penalties for nonperformance. Also, on October 15, 2018, our company entered into a contract with a foreign currency exchange broker to sell 770,000 (for settlement on February 2019) to mitigate the risk of exchange rate fluctuation from this forecasted sale. We will receive $1.23 per 1, which is the forward rate on October 15, 2018, for settlement on February 1, 2019. Our company's functional currency is the U.S. dollar and our forward exchange contract qualifies as a cash flow hedge. The relevant exchange rates and related balances for the period from October 15, 2018, to February 1, 2019, are as follows: Derivative-Forward Forecasted Forward Spot Rate Rate FV Asset Change Date (SUS=61) Transaction (SUS=C1) (Liability in FV Octaber 15, 2018 December 31, 2018 1.21 1.20 $23.100 $22,100 Fearuary 1, 2019 $916,300 30.800 7,700 For settlement on February 1, 2019 ignore discounting in the computation of fair values. a. Prepare the journal entries to record the sale and all adjustments required for the forecasted sale and forward contract at October 15, 2018 December 31, 2018, and February 1, 2019. Note: If no entry is required, select "No entry" as your answers under Description and leave the debit and credit answers blank (zero). Hedged Transaction Date Description Credit 1.19 1.19 Debit 101/15/12 a a 12/31/18 0 . 0 2/1/19 0 D 0 CF Hedge Date Description Debit Credit 10/15/16 0 0 0 0 12/31/18 + 0 0 0 2/1/19 0 + To record change in value D a a To record the ner screen 0 0 o Ta rccard reclassif caran A 0 0 12/31/18 0 0 0 0 2/1/19 0 0 A 0 0 To record change in value. 0 0 0 0 To record the net settlement. 0 O O 0 To record reclassification. b. Reconcile to the forward rate at the forward contract's inception the net cash received for both the sale of goods and the settlement of the forward-contract derivative. Net cash received for sale of goods and settlement of the forward contract derivative is: $ 0 C. What amount of sales was recognized in the quarter ending December 31, 2018? Note: Do not use a negative sign with any of your answers below. $ 0 What amount of sales was recognized in the quarter ending March 31, 2019? $ 0 What is the total amount of sales recognized across the quarters ending December 31, 2018, and March 31, 2019? $ 0