problem 35

currency payae prepare jula Chtl impact on net income over the two accounting periods? 35. On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 100.000 FCUS with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 100,000 FCUS. The company properly designates the forward contract as a ing exchange rates apply: cash flow hedge of a foreign currency receivable. The follow- Forward Rate Date Spot Rate (to April 30, 2018) $0.21 $0.20 November 1, 2017 December 31, 2017 0.19 0.17 April 30, 2018 0.18 N/A Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (I percent per month) is 0.9610 Prepare all journal entries, including December 31 adjusting entries, to record the sale and for- ward contract. a. b. What is the impact on net income in 2017? c. What is the impact on net income in 2018? 36