The following is selected balance sheet information for Taylor Company, which has operations located primarily in Canada. Amounts are in Canadian dollars unless otherwise indicated.

Required:

Taking into account the above information, first identify whether Taylor Company could potentially identify the following items as hedging instruments for accounting purposes. If it is a potential hedging instrument, identify the item being hedged. If not, explain why not.

Transcribed Image Text:

Assets Cash Cash (US$) Accounts receivable Property, plant, and equipment Goodwill Amount $ 30,000 200,000 500,000 1,200,000 400,000 Liabilities and equity Accounts payable Accounts payable (US$) Long-term debt, 6% interest Common shares Retained earnings Amount $ 350,000 300,000 1,000,000 600,000 250,000