Irving plc purchases some inventory from Durant SE for EUR 1 million on 7/1/21. Irving uses the GBP as its reporting currency. Irving buys the inventory on credit and pays the EUR 1 million on 11/1/21. Irving enters into a forward contract at 7/1/21 to exchange GBP 855706 for EUR 1 million on 11/1/21. The forward is treated as a cash flow hedge and has a fair value of GBP 19253 at 9/30/21 (you decide if it’s an asset or liability based on the evidence). Irving's fiscal year ends on 9/30.

Spot exchange rates on various dates (1 EUR = x GBP):

7/1/21 0.867

9/30/21 0.874

11/1/21 0.869

1. How much is foreign exchange gain debited or credited on 9/30/21 (all entries combined)? (Give positive number for debit, negative number for credit, and zero for no entry.)

2. How much is OCI debited or credited on 9/30/21 (all entries combined)? (Give positive number for debit, negative number for credit, and zero for no entry.)

3. How much is accounts payable debited or credited on 11/1/21 (all entries combined)? (Give positive number for debit, negative number for credit, and zero for no entry.)

4. How much is forward contract debited or credited on 11/1/21 (all entries combined)? (Give positive number for debit, negative number for credit, and zero for no entry.)

Answer rating: 100% (QA)

The foreign exchange gain or loss on 93021 is calculated by comparing the GBPEUR exchange rate on 93021 to the rate on the date of the initial transaction 7121 and then multiplying that difference by ... View the full answer