The already displayed answers in the question format, some of them are wrong and some of them are right. Please ignore it.
Hamilton Importing Corp. (HIC) imports goods from countries around the world for sale in Canada. On December 1, Year 3. HIC purchased 11,300 watches from a foreign wholesaler for DM613,000 when the spot rate was DM1 = $0.754. The invoice called for payment to be made on April 1, Year 4. On December 3, Year 3, HIC entered into a forward contract with the Royal Bank at the 120-day forward rate of DM1 = $0.794. Hedge accounting is not applied. The fiscal year-end of HIC is December 31. On this date, the spot rate was DM1 = $0.770 and the 90-day forward rate was DM1 = $0.799. The payment to the foreign supplier was made on April 1, Year 4 when the spot rate was DM1 = $0.816. Required: (a) Prepare the journal entries required in Year 3 and Year 4, assuming that hedge accounting is not applied. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required.) Date Credit December 1, Year 3 Inventory Accounts payable Record the purchase of inventory. General Journal Debit 462202 462202 December 3, Year 3 No journal entry required No journal entry require Record the forward contract. December 31, Year 3 9808 9808 Exchange loss Accounts payable Revalue accounts payable at fair value Exchange loss Loan payable Revalue forward contract at fair value 3065 3065 April 1, Year 4 28198 28198 Exchange loss Loan payable Revalue accounts payable at fair value. Exchange loss Loan payable 10421 10421 Revalue forward contract at fair value. Cash (DM) 500208 3065 Exchange loss Loan payable Revalue forward contract at fair value. 3065 April 1, Year 4 28198 28198 Exchange loss Loan payable Revalue accounts payable at fair value. Exchange loss Loan payable 10421 10421 Revalue forward contract at fair value. 500208 Cash (DM) Loan payable Accounts payable Record the receipt of cash from bank. 13468 486722 V 500208 Accounts payable Cash (DM) Record the cash paid for purchase of inventory. 500208 (b) Prepare a partial statement of financial position as at December 31 Year 3, which shows accounts payable and the forward contract. (Omit $ sign in your response.) Hamilton Importing Corp. Partial Statement of Financial Position at December 31, Year 3 Assets Inventories $ Liabilities Accounts payable 472010 (c) Prepare one journal entry to summarize the combined effect of all entries in part (a). (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "O" wherever required) Summary journal entry General Journal Debit Credit Inventory 462202 Exchange loss Forward contract Record the sumary of purchase of inventory and forward contract. (d) Prepare the journal entries required in Year 3 and Year 4, assuming that the forward contract is designated as a fair value hedge and is segregated between the spot element and forward element. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required.) Date General Journal Debit Credit December 1, Year 3 Click to select) (Click to select) Record the purchase of inventory. December 3, Year 3 (Click to select) (Click to select Record the forward contract. December 31, Year 3 (Click to select) (Click to select) Revalue accounts payable at fair value. (Click to select) (Click to select) (Click to select Revalue forward contract at fair value. Click to select) (Click to select) Record amortization loss from premium on forward contract over 4 months. April 1, Year 4 (Click to select) (Click to select) Revalue accounts payable at fair value. December 3, Year 3 (Click to select) (Click to select Record the forward contract. December 31, Year 3 Click to select) (Click to select) Revalue accounts payable at fair value. V v (Click to select) (Click to select) (Click to select) Revalue forward contract at fair value. (Click to select) (Click to select) Record amortization loss from premium on forward contract over 4 months Click to select) (Click to select) Revalue accounts payable at fair value. (Click to select (Click to select) (Click to select Revalue forward contract at fair value. April 1. Year 4 (Click to select) Click to select) Record amortization loss from premium on forward contract over 4 months. V (Click to select) (Click to select) (Click to select) Record the receipt of cash from bank. (Click to select) (Click to select Record the cash paid for purchase of inventory. LIDL (Click to select) Revalue forward contract at fair value. Click to select) Click to select) Record amortization loss from premium on forward contract over 4 months. (Click to select) (Click to select) Revalue accounts payable at fair value. April 1, Year 4 I Click to select) (Click to select) (Click to select) Revalue forward contract at fair value. (Click to select) (Click to select) Record amortization loss from premium on forward contract over 4 months. V (Click to select) (Click to select) (Click to select) Record the receipt of cash from bank. (Click to select (Click to select) Record the cash paid for purchase of inventory. (e) Prepare one journal entry to summarize the combined effect of all entries in part (d). (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank.be certain to enter "0" wherever required.) Summary Journal entry V General Journal Debit Credit Click to select) (Click to select) (Click to select) Record the summary of purchase of inventory and forward contract. V Hamilton Importing Corp. (HIC) imports goods from countries around the world for sale in Canada. On December 1, Year 3, HIC purchased 11,300 watches from a foreign wholesaler for DM613,000 when the spot rate was DM1 = $0.754. The invoice called for payment to be made on April 1. Year 4. On December 3, Year 3, HIC entered into a forward contract with the Royal Bank at the 120-day forward rate of DM1 = $0.794. Hedge accounting is not applied. The fiscal year end of HIC is December 31. On this date, the spot rate was DM1 = $0.770 and the 90-day forward rate was DM1 - $0.799. The payment to the foreign supplier was made on April 1, Year 4, when the spot rate was DM1 = $0.816 Required: (a) Prepare the journal entries required in Year 3 and Year 4, assuming that hedge accounting is not applied. (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required.) which shows accounts payable and the forward (b) Prepare a partial statement of financial position as at December 31, Year contract. (Omit $ sign in your response.) Hamilton Importing Corp. Partial Statement of Financial Position at December 31, Year 3 Assets Inventories $ Liabilities Accounts payable 472010 (c) Prepare one journal entry to summarize the combined effect of all entries in part (a). (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "0" wherever required.) Credit Summary journal entry General Journal Debit Inventory 462202 Exchange loss Forward contract Record the summary of purchase of inventory and forward contract. Record the summary of purchase of inventory and forward contract. (d) Prepare the journal entries required in Year 3 and Year 4, assuming that the forward contract is designated as a fair value hedge and is segregated between the spot element and forward element. (In cases where no entry is required, please select the option "No journal entry required for your answer to grade correctly. Leave no cells blank.be certain to enter "0" wherever required.) (e) Prepare one journal entry to summarize the combined effect of all entries in part (d). (In cases where no entry is required, please select the option "No journal entry required" for your answer to grade correctly. Leave no cells blank - be certain to enter "O" wherever required.) Credit Summary Journal entry General Journal Debit (Click to select) (Click to select) Click to select) Record the summary of purchase of inventory and forward contract
