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Abbotsford Farm Products Ltd. (AFP) is a Canadian company that manufactures and exports fertilizer. On November 30, 2025, the company hedged a forecasted sale to take place on February 1, 2026, to a company in Sweden worth 1,080,000 Krona (SEK). AFP has a December 31 year-end. Assume that the hedge meets the criteria to be classified as a cash flow hedge and has been determined to be effective. View the exchange rates. Required Prepare the journal entries to record these events for AFP in 2025 and 2026 using the gross method for the forward contract. Exchange Rates The relevant exchange rates are Date November 30, 2025 December 31, 2025 February 1, 2026 Event Enter into hedge Year-end date Product delivered, proceeds collected, and forward contract settled pages Get more cip - X e last redit Forward rate for contracts settling on Spot rate February 1, 2026 1 SEK $0.1446 0.1501 1 SEK $0.1449 0.1551 1 SEK $0.1525 N/A Print Done Vicar un CICOR answer

Abbotsford Farm Products Ltd. (AFP) is a Canadian company that manufactures and exports fertilizer. On November 30, 2025, the company hedged a forecasted sale to take place on February 1, 2026, to a company in Sweden worth 1,080,000 Krona (SEK). AFP has a December 31 year-end. Assume that the hedge meets the criteria to be classified as a cash flow hedge and has been determined to be effective. View the exchange rates. Required Prepare the journal entries to record these events for AFP in 2025 and 2026 using the gross method for the forward contract. Exchange Rates The relevant exchange rates are Date November 30, 2025 December 31, 2025 February 1, 2026 Event Enter into hedge Year-end date Product delivered, proceeds collected, and forward contract settled pages Get more cip - X e last redit Forward rate for contracts settling on Spot rate February 1, 2026 1 SEK $0.1446 0.1501 1 SEK $0.1449 0.1551 1 SEK $0.1525 N/A Print Done Vicar un CICOR answer

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Abbotsford Farm Products Ltd. (AFP) is a Canadian company that manufactures and exports fertilizer. On November 30, 2025, the company hedged a forecasted sale to take place on February 1, 2026, to a company in Sweden worth 1,080,000 Krona (SEK). AFP has a December 31 year-end. Assume that the hedge meets the criteria to be classified as a cash flow hedge and has been determined to be effective. View the exchange rates. Required Prepare the journal entries to record these events for AFP in 2025 and 2026 using the gross method for the forward contract. Exchange Rates The relevant exchange rates are Date November 30, 2025 December 31, 2025 February 1, 2026 Event Enter into hedge Year-end date Product delivered, proceeds collected, and forward contract settled pages Get more cip - X e last redit Forward rate for contracts settling on Spot rate February 1, 2026 1 SEK $0.1446 0.1501 1 SEK $0.1449 0.1551 1 SEK $0.1525 N/A Print Done Vicar un CICOR answer
Transcribed Image Text:Abbotsford Farm Products Ltd. (AFP) is a Canadian company that manufactures and exports fertilizer. On November 30, 2025, the company hedged a forecasted sale to take place on February 1, 2026, to a company in Sweden worth 1,080,000 Krona (SEK). AFP has a December 31 year-end. Assume that the hedge meets the criteria to be classified as a cash flow hedge and has been determined to be effective. View the exchange rates. Required Prepare the journal entries to record these events for AFP in 2025 and 2026 using the gross method for the forward contract. Exchange Rates The relevant exchange rates are Date November 30, 2025 December 31, 2025 February 1, 2026 Event Enter into hedge Year-end date Product delivered, proceeds collected, and forward contract settled pages Get more cip - X e last redit Forward rate for contracts settling on Spot rate February 1, 2026 1 SEK $0.1446 0.1501 1 SEK $0.1449 0.1551 1 SEK $0.1525 N/A Print Done Vicar un CICOR answer
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