Question: E8.10 Hedged Purchase Commitment with Adjusting Entries On May 1, 2023, Global Foods, a U.S. company with a June 30 year-end, agreed to purchase

E8.10 Hedged Purchase Commitment with Adjusting Entries On May 1, 2023, Global

E8.10 Hedged Purchase Commitment with Adjusting Entries On May 1, 2023, Global Foods, a U.S. company with a June 30 year-end, agreed to purchase merchandise from a New Zealand supplier for NZ$1,000,000 on August 31, 2023. On May 1, Global entered a forward purchase contract that locked in the cost of the purchase at $730,000, delivered on August 31. The forward qualified as a fair value hedge of the firm commitment to buy the merchandise. On August 31, Global took delivery of the merchandise, closed the forward contract, and used the NZ$1,000,000 to pay the supplier. Exchange rates are as follows (S/NZ$): Forward Rate for Delivery August 31, 2023 May 1, 2023. June 30, 2023.. August 31, 2023. Required Spot Rate $0.735 0.734 0.732 $0.730 0.729 Prepare journal entries to record the above information at June 30, 2023, and August 31, 2023.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Fair Value Hedge of a Foreign Currency Firm Commitment: Call Options On May 1, 2020, Greenwave Foods, a U.S. company, issued a purchase order to an Italian company for 10,000,000 in food products, to...

E9.12 Fair Value Hedge of a Foreign Currency Firm Commitment: Call Options On May 1, 2020, Greenwave Foods, a U.S. company, issued a purchase order to an Italian company for 10,000,000 in food...

E8.10 Hedged Purchase Commitment and Exposed Liability Position, with Adjusting En- LO 2,3 tries On November 20, 2020, International Foods, a U.S. company, agreed to purchase merchandise from a Hong...

E810 Hedged Purchase Commitment and Exposed Liability Position, with Adjusting En- tries On November 20, 2020, International Foods, a U.S. company, agreed to purchase merchandise from a Hong Kong...

Using the Annual Report of your selected company answer the following questions in the Discussion: What are adjusting entries and why are they necessary? In your chosen company, which accounts might...

i have to calculate CASH FLOW DOL FOR 2014 AND 2015 for these two companies and need to state why there are significant differences in the DOL between the companies? Annual Report GUD Holdings...

What was the acquisition premium and what do you conclude from it regarding the fairness of the deal? What was the market reaction to the acquisition announcement and what do you conclude from it...

The cash account for Online Medical Co, at June 30, 2012, indicated a balance of $9,375. The bank statement indicated a balance of $10,760 on June 30, 2012. Comparing the bank statement and the...

Analyze this scenario from the standpoint of law and of ethics using the Ethical Decision Making: A Toolkit. In the spring of 2015, an ad posted throughout the London subway system created...

Fraud is best detected through financial statements by focusing on: a . unexplained changes in financial statement balances. b . intuition. c . consistencies. d . management's behavior when financial...

Calculate the amount of taxes owed given an amount of taxable income.

Create an anonymous function for 20x 2 - 200x + 3 and use it a. To plot the function to determine the approximate location of its minimum b. With the fminbnd function to precisely determine the...

Figure P20 shows a mass-spring model of the type used to design packaging systems and vehicle suspensions, for example. The springs exert a force that is proportional to their compression, and the...

Use the information for Crosley Company in E21.8. Assume that Dexter Corporation does not know the rate implicit in the lease used by Crosley, and Dexters incremental borrowing rate is 8%. In...

In a stack of polarizing sheets, each sheet has its transmission axis rotated 14 with respect to the preceding sheet. If the stack passes 37% of the incident unpolarized light, how many sheets does...

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

2-3. Employers use various defenses against discrimination allegations. Here employers need to distinguish between disparate treatment (intentional discrimination) and disparate impact (a policy that...

2-4. All managers play an important role in the EEOC enforcement process. The basic steps in this process include filing the charge, charge acceptance by the EEOC, serving notice on the employer, the...

2-2. Equal employment law continues to evolve, with important new legislation enacted since 19901991. The Civil Rights Act of 1991 reversed the effects of several Supreme Court rulingsfor instance,...