Part 1 On October 1,2024, Blue Truck Company purchased inventory from...
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Accounting
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On October Blue Truck Company purchased inventory from a British supplier at a price of British pounds. On October Blue Truck pays $ for a threemonth call option on pounds with a strike price of $ per pound. The option is considered to be a cash flow hedge of a foreign currency transaction. On December the option has a fair value of $ The following spot exchange rates apply:
Date Spot Rate
October $
December $
February $
Use the journal entries given and find the values assuming Blue Truck uses a calendar year end.
Accounts Recievable
Sales
Foreign Exchange GainLoss
Accounts Recievable
OCI
Foreign Exchange GainLoss
Forward Contract
OCI
Foreign Exchange GainLoss
Accounts Recievable
OCI
Foreign Exchange GainLoss
Forward Contract
OCI
Foreign Currency
Accounts Receivable
Cash
Foreign Currency
Forward Contract
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