problem 1

(40 POINTS) PROBLEMI (20 POINTS) On November 1, 2019, Americo, Corporation sold wine on credit to Venezia Company for 540,000. Payment is not due for 120 days. Thus, the transaction will be settled on February 28, 2020. On November 1, 2019, America, Corporation also entered into a 120-day forward contract to sell 6540,000. The forward contract is not designated as a hedge. The direct exchange rates were as follows: SPOT 11/1/2019 $ 1.07 $ 12/01/2019 1095 2/21/2020 105 FORWARD 1.10 (120 days) 1.13 (60 days) REQUIRED: Prepare the required information below for both the original (underlying) transaction and the related forward contract. IN ORDER TO BE AWARDED CREDIT FOR YOUR ANSWERS, YOU NEED TO CLEARLY SHOW ALL OF YOUR WORK OURNALINTRIES AT NOVEMBER 1, 2019 TRANSACTION DATO Foreign Currency Transaction (1 POINT) Forward Contract (3 POINTS) DECEMBER 31, 2019 YEAR-END JOURNAL ENTRIES Foreign Currency Transaction (2 POINTS) Forward Contract (2 POINTS) FINANCIAL STATEMENT PRESENTATION INCOME STATEMENT (1 POINT) BALANCE SHEET (4 POINTS) OURNALINTRIES AT FEBRUARY MOSTMENT DATO Foreign Currency Transaction (3 POINTS) Forward Contract (4 POINTS) 1