Entries on December 1, 2017, Sizzler Foods, a U.S. company, purchased merchandise from a Hong...
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Entries on December 1, 2017, Sizzler Foods, a U.S. company, purchased merchandise from a Hong Kong supplier at a price of HK$10,000,000, payable in three months in Hong Kong dollars. To hedge its exposed liability position, Sizzler entered a forward contract for purchase of HK$10,000,000 on March 1, 2018. On March 1, Sizzler closed the forward contract and used the Hong Kong dollars to pay its supplier. Sizzlers accounting year ends January 31 Spot rate Forward rate for delivery March 1, 2018 December 1, 2017 $0.1289 $0.1293 January 31, 2018 0.1299 0.1304 March 1, 2018 0.1303 -- Required: Prepare the journal entries Sizzler Foods made on December 1, 2017 and March 1, 2018to record the above transactions, as well as its end-of-year adjusting entries on January31, 2018.
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