On 12/1/21, Northridge Co., a U.S. machine manufacturer, sells machines to York Co., a British company,...

 

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On 12/1/21, Northridge Co., a U.S. machine manufacturer, sells machines to York Co., a British company, for 100,000 British Pound (£) on credit. Payment is due in 90 days (March 1, 2022). The current exchange rate is £1 = $1.40 on 12/1/21. Northridge Co. signs a 90-day forward contract with Wells Fargo Bank to deliver £100,000 and the 90-day forward rate is £1 = $1.30 on 12/1/21. • On Northridge Co's fiscal year ends, 12/31/21, spot rate is £1 = $1.50 and available forward rate to March 1, 2022 is £1 = $1.45. On 3/1/22, the original receivable and the forward contract come due. The exchange rate is £1= $1.20 on 3/1/22. • Using Cash Flow Hedge method, prepare Northridge Co's all journal entries for 12/1/21, 12/31/21, and 3/1/22 On 12/1/21, Northridge Co., a U.S. machine manufacturer, sells machines to York Co., a British company, for 100,000 British Pound (£) on credit. Payment is due in 90 days (March 1, 2022). The current exchange rate is £1 = $1.40 on 12/1/21. Northridge Co. signs a 90-day forward contract with Wells Fargo Bank to deliver £100,000 and the 90-day forward rate is £1 = $1.30 on 12/1/21. • On Northridge Co's fiscal year ends, 12/31/21, spot rate is £1 = $1.50 and available forward rate to March 1, 2022 is £1 = $1.45. On 3/1/22, the original receivable and the forward contract come due. The exchange rate is £1= $1.20 on 3/1/22. • Using Cash Flow Hedge method, prepare Northridge Co's all journal entries for 12/1/21, 12/31/21, and 3/1/22

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A B 1 2 3 4 5 6 12312018 Accounts Receivables 1000001... View the full answer