Sho of New York is an international dealer in jewelry and engages in numerous import and export activities.

Sho's receivables and payables in foreign currency units before year-end adjustments on December 31, 2016, are summarized as follows:

REQUIRED
1. Determine the amount at which the receivables and payables should be reported in Sho's December 31, 2016, balance sheet.
2. Calculate individual gains and losses on each of the receivables and payables and the net exchange gain that should appear in Sho's 2016 income statement.
3. When the sale occurs, assume that Sho 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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Current Rate on December 31, 2016 Rate on Date of Per Books in U.S. Dollars Foreign Currenc,y Currency Units Transaction Accounts Receivable Denominated in Foreign Currency British pounds Euros Swedish krona Japanese yen 100,000 250,000 160,000 2,000,000 $1.6500 $0.6600 $0.6600 $0.0075 $165,000 165,000 105,600 15,000 S450,600 $1.6600 $0.6700 $0.6400 $0.0076 Current Rate on December 31, 2016 Rate on Date of Per Books in U.S. Dollars Foreign Currenc,y Currency Units Transaction Accounts Payable Denominated in Foreign Currency $0.7000 $0.1300 $0.0074 $0.6900 $0.1350 $0.0076 Canadian dollars 150,000 220,000 4,500,000 $105,000 28,600 33,300 $166,900 Mexican pesos Japanese yen