Calvin Inc. $(aU.S.-$based company$)$ sells parts $to$ a foreign customer $on$ December $1,2023,$ with payment $of$

$100,000$ euros $tobe$ received $on$ February $1,2024.$ Calvin enters into a forward contract $on$ December $1,$

$2023to$ sell $100,000$ euros $on$ February $1,2024.$ The forward points $on$ the forward contract are excluded $in$

assessing hedge effectiveness and are amortized $to$ net income using a straight$-$line method $on$ a monthly

basis. Calvin must close its books and prepare financial statements $at$ December $31.$ Relevant exchange

rates for the euro $on$ various dates are $as$ follows:

REQUI

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$ng$ that

Calvin

designates the forward contract $as$ a cash flow hedge $of$ a foreign currency receivable, $on$

December $31,2023,$ what should $be$ recorded for the forward contract? Asset $or$ Liability?

$b.$ How much will $be$ recorded for Sales $on$ this transaction?

$c.$ What account will $be$ used $to$ offset foreign exchange gains and losses from the transaction

assuming Calvin designates the forward contract $as$ a cash flow hedge.

$d.$ What $is$ the overall foreign exchange gain $or$ loss recorded $on$ this transaction and its

accompanying forward contract?

$e.$ Prepare the final transactions for February $1,2024$ for the foreign currency collection and the

satisfaction $of$ the forward contract.