On April 1, 2011, Win of Canada ordered customized fittings from Ace, a U.S. firm, to be delivered on May 31, 2011, at a price of 50,000 Canadian dollars. The spot rate for Canadian dollars on April 1, 2011, was $0.71. Also on April 1, in order to fix the sale price of the fittings at $35,250, Ace entered into a 60-day forward contract with the exchange broker to hedge the Win contract. This derivative met the conditions set forth in ASC Topic 815 for a hedge of a foreign currency commitment. Exchange rates for Canadian dollars are as follows:
| April 1 | May 31 |
Spot rate | $0.710 | $0.725 |
60-day forward rate | 0.705 | 0.715 |
REQUIRED: Prepare all journal entries on Ace’s books to account for the commitment and related events on April 1 and May 31, 2011.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.