The question relates to either Chapter 9 ( Foreign Currency Translations and Hedging Foreign Exchange Risk ) or Chapter 10 ( Translation of Foreign Currency Financial Statements ) For Advanced Accounting 13th Edition by Joe B. Hoyle, Thomas F, Schaefer, and Timothy S. Doupnik. Details are included in the image Need all calculations, journal entries, work, etc. (25 Points) On November 1, 2013, King Co. sold inventory to a customer ina foreign country. King agreed to accept 96,000 local currency units (LCU)in full payment for this inventory. Payment was to be made on February 1,2014. Also on November 1, King entered into a forward exchange contractwherein 96,000 LCU would be delivered to a currency broker on February1. The spot rates and forward rates on various dates were as follows:November 1,$.35 = 1Spot Rate2013LCU$.30 = 1LCUForwardRateDecember 31,$.29 = 1Spot Rate2013LCU$.28 = 1LCUForwardRateFebruary 1,2014$.27 = 1Spot RateLCUThe company's borrowing rate is 12%. The applicable present value factorfor is .9901. (A) Prepare journal entries for this sales transaction and forwardcontract. The forward contract is considered a fair value hedge.(B) Compute the effect on 2013 and 2014 net income.

Date Spot Rate Value Change Forward Rate Change 11/01/13 0.35 $33,600 12/01/13 0.32…

Answered: 25 Points) On November 1, 2013, King…

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The question relates to either Chapter 9 ( Foreign Currency Translations and Hedging Foreign Exchange Risk ) or Chapter 10 ( Translation of Foreign Currency Financial Statements ) For Advanced Accounting 13th Edition by Joe B. Hoyle, Thomas F, Schaefer, and Timothy S. Doupnik.

Details are included in the image
Need all calculations, journal entries, work, etc.

(25 Points) On November 1, 2013, King Co. sold inventory to a customer in
a foreign country. King agreed to accept 96,000 local currency units (LCU)
in full payment for this inventory. Payment was to be made on February 1,
2014. Also on November 1, King entered into a forward exchange contract
wherein 96,000 LCU would be delivered to a currency broker on February
1. The spot rates and forward rates on various dates were as follows:
November 1,
$.35 = 1
Spot Rate
2013
LCU
$.30 = 1
LCU
Forward
Rate
December 31,
$.29 = 1
Spot Rate
2013
LCU
$.28 = 1
LCU
Forward
Rate
February 1,
2014
$.27 = 1
Spot Rate
LCU
The company's borrowing rate is 12%. The applicable present value factor
for is .9901.

(A) Prepare journal entries for this sales transaction and forward
contract. The forward contract is considered a fair value hedge.
(B) Compute the effect on 2013 and 2014 net income.

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