Question 3 18 pts A U.S. company buys merchandise from a Singapore supplier on May...
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Question 3 18 pts A U.S. company buys merchandise from a Singapore supplier on May 1 for S$100,000. The company pays the bill on August 1. To hedge foreign exchange risk, on May 1 the U.S. company enters a forward purchase contract for S$100,000 with an August 1 delivery date. On August 1 the company purchases the Singapore dollars through the forward contract and pays the supplier. The company's fiscal year ends June 30. Relevant rates ($/S$) are as follows: May 1 June 30 August 1 Spot Rate $0.758 0.767 0.773 Forward Rate for August 1 Delivery $0.759 0.770 0.773 Required Make the journal entries to record the above events, including appropriate fiscal year-end adjusting entries. Use the capital letters below and list debit letters and amount first. A. Accounts Payable. E. Foreign Currency B. Cash F. Inventory C. Exchange Gain G. Investment in Forward D. Exchange Loss
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