Question: Pinware Wholesalers Inc Pinware imports high quality goods from select

Pinware Wholesalers Inc. (Pinware) imports high quality goods from select European countries. On May 1, 20X3, Pinware purchased Swiss watches from a supplier in Switzerland for 400,000 Swiss francs (CHF). Payment of the invoice was due on August 31, 20X3. On May 1, 20X3, Pinware also entered into a forward contract that was a perfect hedge of the full amount of the invoice price at a rate of CHF1 C$ 0.945. Pinware’s year-end is June 30 and, on June 30, the August 31, 20X3, forward rate is CHF1 C$ 0.925. On August 31, 20X3, the forward contract was settled and the Swiss supplier was paid. The relevant spot rates were as follows:
May 1, 20X3........................ CHF1 = C$ 0.930
June 30, 20X3...................... CHF1 = C$ 0.920
August 31, 20X3..................... CHF1 = C$ 0.915

Required
Prepare all relevant journal entries to record the transactions related to the purchase of the watches. Be sure to include any year-end adjustments required on June 30, 20X3.



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  • CreatedMarch 13, 2015
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