On April 1, 2016, Win of Canada ordered customized fittings from Ace, a U.S. firm, to be
Question:
On April 1, 2016, Win of Canada ordered customized fittings from Ace, a U.S. firm, to be delivered on May 31, 2016, at a price of 50,000 Canadian dollars. The spot rate for Canadian dollars on April 1, 2016, was $0.71. Also on April 1, in order to fix the sale price of the fittings at $35,250, Ace entered into a 60-day forward contract with the exchange broker to hedge the Win contract. This derivative met the conditions set forth in ASC Topic 815 for a hedge of a foreign currency commitment. Exchange rates for Canadian dollars are as follows:
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REQUIRED:
Prepare all journal entries on Ace's books to account for the commitment and related events on April 1 and May 31, 2016.
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for...
Step by Step Answer:
April 1 2016 Contract receivable A 35250 Contract payable fcL 35250 To record fo...View the full answer
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
