My writer delivered an awesome dissertation on the Creek War, I definitely didn’t have the time to do all the research she did on my own.
Essay (any type)
09/08/2022
Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the world. On December…
Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the world. On December 1, Year 5, MEI sold 10,000 carvings to a wholesaler in a foreign country at a total cost of 600,000 foreign currency units (FCs) when the spot rate was FC1 5 $0.741. The invoice required the foreign wholesaler to remit by April 1, Year 6. On December 3, Year 5, MEI entered into a forward contract with the Royal Bank at the 120-day forward rate of FC1 5 $0.781. Hedge accounting is not applied. The fiscal year-end of MEI is December 31, and on this date the spot rate was FC1 5 $0.757 and the forward rate was FC1 5 $0.791. The payment from the foreign customer was received on April 1, Year 6, when the spot rate was FC1 5 $0.802. Required: (a) Prepare the journal entries to record (i) the sale and the forward contract, (ii) any adjustments required on December 31, and (iii) the cash received in Year 6. (b) Prepare a partial balance sheet of MEI on December 31, Year 5, that shows the presentation of the receivable and the accounts associated with the forward contract. *(c) Now assume that a discount rate of 6% per annum, or 0.5% per month, is applied when determining the fair value of the forward contract at December 31, Year 5. Prepare the journal entries to record (i) the sale and the forward contract, (ii) any adjustments required on December 31, and (iii) the cash received in Year 6.
