Complete foreign financial statement conversions.

Acme Corporation, a U$.$S$.-$based importer of beer and wine, purchased $1,000$ cases of Oktoberfest$-$style beer from Coyote for $50,000$ euros before

purchasing the company. Relevant US dollar exchange rates for the euro are as follows:

The company closes its books and prepares third$-$quarter financial statements on September $30.$

Assume that the beer arrived on August $15,$ and the company made payment on October $15.$ There was no attempt to hedge the exposure to

foreign exchange risk. Prepare journal entries to account for this import purchase. Assume that the beer arrived on August $15,$ and the company made payment on Detober $15.$ On August $15,$ the

company entered into a two$-$month forward contract to purchase $50,000$ euros. The company designated the forward

contract as a cash flow hedge of a foreign currency payable. Forward points are excluded in assessing hedge

effectiveness and amortized to net income using a straight line method on a monthly basis. Prepare journal entries to

account for the import purchase and foreign currency forward contract. Assume that the company ordered the beer on August $15.$ The beer arrived and the company paid for it on Detober $15.$

Dr August $15,$ the company entered into a two$-$month forward contract to purchase $50,000$ euros. The company designated

the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is

measured by referring to changes in the forward rate. Forward points are not excluded in assessing hedge effectiveness.

Prepare journal entries to account for the foreign currency forward contract, foreign currency firm commitment, and import

purchase. Assume that the company ordered the beer on August $15.$ The beer arrived and the company paid for it on Detober $15.$

On August $15,$ the company purchased a two$-$month call option on $50,000$ euros. The company designated the option as a

fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to

changes in the spot rate. The time value of the option is excluded from the assessment of hedge effectiveness, and the

change in time value is recognized in net income over the life of the option. Prepare journal entries to account for the

foreign currency option, foreign currency firm commitment, and import purchase.sAssume that on August $15,$ the company forecasted the purchase of beer on Dctober $15.$ On August $15,$ the company

acquired a two$-$month call option on $50,000$ euros. The company designated the option as a cash value hedge of a

forecasted foreign currency transaction. The time value of the option is excluded from the assessment of hedge

effectiveness, and the change in time value is recognized in net income over the life of the option. Prepare journal entries

to account for the foreign currency option and import purchase.

Auqur: $15$

Soptombor $30$

$0kabpropr15$

Daks af

Sals

Journal Entries

fFEr$+$cerk$+$il

Debit

Credit