Wild West, Incorporated (a U.S. corporation) sold inventory to a company in the Philippines for 1,600,000 pesos on account on February 1, 2014, with payment expected in 90 days. Wild West entered into a forward contract to hedge this transaction, and properly accounts for the transaction as a cash flow hedge. Wild West has a March 31 fiscal year end, and uses an 8% discount rate, resulting in a 30-day present value factor of .9934. The forward contract is settled net. The relevant exchange rates are shown below:
Required:
Record the journal entries needed by Wild West on February 1, March 31, and May 2. Round all entries to the nearest whole dollar.

Question

Wild West, Incorporated (a U.S. corporation) sold inventory to a company in the Philippines for 1,600,000 pesos on account on February 1, 2014, with payment expected in 90 days. Wild West entered into a forward contract to hedge this transaction, and properly accounts for the transaction as a cash flow hedge. Wild West has a March 31 fiscal year end, and uses an 8% discount rate, resulting in a 30-day present value factor of .9934. The forward contract is settled net. The relevant exchange rates are shown below:
  Required:
Record the journal entries needed by Wild West on February 1, March 31, and May 2. Round all entries to the nearest whole dollar.

Quizplus · Accepted Answer

The Answer of Wild West, Incorporated (a U.S. corporation) sold inventory to a company in the Philippines for 1,600,000 pesos on account on February 1, 2014, with payment expected in 90 days. Wild West entered into a forward contract to hedge this transaction, and properly accounts for the transaction as a cash flow hedge. Wild West has a March 31 fiscal year end, and uses an 8% discount rate, resulting in a 30-day present value factor of .9934. The forward contract is settled net. The relevant exchange rates are shown below:
  Required:
Record the journal entries needed by Wild West on February 1, March 31, and May 2. Round all entries to the nearest whole dollar.

Wild West, Incorporated (A U