Maplehauff Inc. sells lumber to a number of clients around the world. On December 1, 2015 the company shipped some lumber to a client in the U.S. The selling price was established at US$600,000 with payment to be received on March 1, 2016. On December 3, 2015 the company entered into a hedge with a Canadian Bank at the 90 day forward rate of US$1 = CDN$1.275. The forward contract was designated as a fair value hedge of the amount due from the American customer.
Maplehauff Inc. received the payment from its American client on March 1, 2016. The company's year-end is on December 31. The two-month forward rate for US dollars was CDN$1.255 on that date.
Selected spot rates were as follows:
$$\begin{array} { | l | l | }
\hline \text { December 1, 2015: } & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2356 \
\hline \text { December } 3,2015 : & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2365 \
\hline \text { December } 31,2015 : & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2456 \
\hline \text { March 1, 2016: } & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2480 \
\hline
\end{array}$$
-Prepare a partial Balance Sheet for Maplehauff Inc. on December 31, 2015 showing the Account Receivable from the American client as well as the accounts associated with the hedge.

Question

Maplehauff Inc. sells lumber to a number of clients around the world. On December 1, 2015 the company shipped some lumber to a client in the U.S. The selling price was established at US$600,000 with payment to be received on March 1, 2016. On December 3, 2015 the company entered into a hedge with a Canadian Bank at the 90 day forward rate of US$1 = CDN$1.275. The forward contract was designated as a fair value hedge of the amount due from the American customer.
Maplehauff Inc. received the payment from its American client on March 1, 2016. The company's year-end is on December 31. The two-month forward rate for US dollars was CDN$1.255 on that date.
Selected spot rates were as follows:
 $$\begin{array} { | l | l | } 
\hline \text { December 1, 2015: } & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2356 \
\hline \text { December } 3,2015 : & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2365 \
\hline \text { December } 31,2015 : & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2456 \
\hline \text { March 1, 2016: } & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2480 \
\hline
\end{array}$$
-Prepare a partial Balance Sheet for Maplehauff Inc. on December 31, 2015 showing the Account Receivable from the American client as well as the accounts associated with the hedge.

Quizplus · Accepted Answer

The Answer of Maplehauff Inc. sells lumber to a number of clients around the world. On December 1, 2015 the company shipped some lumber to a client in the U.S. The selling price was established at US$600,000 with payment to be received on March 1, 2016. On December 3, 2015 the company entered into a hedge with a Canadian Bank at the 90 day forward rate of US$1 = CDN$1.275. The forward contract was designated as a fair value hedge of the amount due from the American customer.
Maplehauff Inc. received the payment from its American client on March 1, 2016. The company's year-end is on December 31. The two-month forward rate for US dollars was CDN$1.255 on that date.
Selected spot rates were as follows:
 $$\begin{array} { | l | l | } 
\hline \text { December 1, 2015: } & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2356 \
\hline \text { December } 3,2015 : & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2365 \
\hline \text { December } 31,2015 : & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2456 \
\hline \text { March 1, 2016: } & \text { US } \$ 1 = \operatorname { CDN } \$ 1.2480 \
\hline
\end{array}$$
-Prepare a partial Balance Sheet for Maplehauff Inc. on December 31, 2015 showing the Account Receivable from the American client as well as the accounts associated with the hedge.

Maplehauff Inc -Prepare a Partial Balance Sheet for Maplehauff Inc