Question: Muskoka Furniture Inc Muskoka imports pine furniture from factories around

Muskoka Furniture Inc. (Muskoka) imports pine furniture from factories around the world for sale to retailers in Canada. On October 31, 20X4, Muskoka bought bedroom furniture set from a supplier in the United States for US\$ 2,000. The invoice called for payment to be made on February 28, 20X5. On November 1, 20X4, Muskoka entered into a forward contract with a bank to hedge the existing monetary position by agreeing to buy US\$ 2,000 on February 28, 20X5, at a rate of US\$ 1 C\$ 1.15. Muskoka’s year-end is December 31. On February 28, 20X5, Muskoka settled the forward contract with the bank and the US supplier was paid.
Spot rates were as follows:
October 31, 20X4...................... US\$ 1 = C\$ 1.14
November 1, 20X4....................... US\$ 1 = C\$ 1.14
December 31, 20X4............................ US\$ 1 = C\$ 1.16
February 28, 20X5...................... US\$ 1 = C\$ 1.19
The February 28, 20X5, forward rate on December 31, 20X4, was US\$ 1 = C\$ 1.165.

Required
Prepare journal entries to record all of the transactions, including any adjustments required on December 31, 20X4. Show your supporting calculations.

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