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    May 19, 2012, 09:53 PM
    Advance accounting problems translation
    Imperial Corp. a U.S. corporation, entered into a contract on November 1, 2013, to sell two machines to
    Crown Company, for 95,000 foreign currency units (FCU). The machines were to be delivered and the
    Amount collected on March 1, 2014.

    In order to hedge its commitment, Imperial entered into a forward contract for 95,000 FCU delivery on
    March 1, 2014. The forward contract met all conditions for hedging an identifiable foreign currency
    Commitment.

    Selected exchange rates for FCU at various dates were as follows:

    November 1, 2013 – Spot rate $1.3076
    Forward rate for delivery on March 1, 2014 1.2980
    December 31, 2013 – Spot rate 1.3060
    Forward rate for delivery on March 1, 2014 1.3150
    March 1, 2014 – Spot rate 1.2972

    Required:
    Prepare all journal entries relative to the above on the books of Imperial Corp. on the following dates:
    1. November 1, 2013.
    2. Year-end adjustments on December 31, 2013.
    3. March 1, 2014. (Include all adjustments related to the forward contract.)

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