Shelton Corporation of New York is an international dealer in jewelry and engages in numerous import and export activities. Shelton's receivables and payables in foreign currency units before year-end adjustments on December 31, 2011, are summarized as follows:

REQUIRED1. Determine the amount at which the receivables and payables should be reported in Shelton's December 31, 2011, balance sheet.2. Calculate individual gains and losses on each of the receivables and payables and the net exchange gain that should appear in Shelton's 2011 income statement.3. Assume that Shelton wants to hedge its exposure to amounts denominated in Euros. Should it buy or sell Euros for future delivery? In what amount or amounts ?

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Rate on Date of Transaction Per Books in U.S. Dollars Current Rate on 12/31/11 Currency Units Foreign Currency Accounts Receivable Denominated in Foreign Currency British pounds Euros Swedish krona Japanese yen 100,000 250,000 $1.6500 $165,000 $1.6600 0.6600 0.6700 0.6600 0.0075 105,600 15.000 $450,600 2,000,000 0.0076 Accounts Payable Denominated in Foreign Currency Canadian dollars Mexican pesos Japanese yen 150,000 220,000 4,500,000 $0.7000 $105,000 $0.6900 0.1300 0.0074 33.300 $166.900 0.0076