please help me to solve this problem and please do not give answer in image formate Woody Limited, a furniture manufacturer, was afraid that the wood price would increase andconsequently its gross profit margin would be lowered.To hedge against the risk, Woody Limited entered a wood future contract on 1 November2021 and designated this contract as a cash flow hedge.The notional amount of the contract is for 250 board feet, and the terms of the contract givethe company the right and the obligation to purchase wood at a preset price of $4,800 perboard feet. The contract expires on 31 January 2022.Spot Price for January Delivery$4,800 per board feet$5,200 per board feet$5,200 per board feetDate1 November 202131 December 20215 January 2022On 5 January 2022, Woody Limited purchased the wood for cash at the spot price and settledthe futures contract.On 10 February 2022, Woody Limited sells furniture containing the wood purchased inJanuary 2022 for $2,150,000. The cost of the finished goods is $1,530,000.Required:(a) Prepare all journal entries that are related to the futures contract for Woody Limited on1 November 2021, 31 December 2021 and 5 January 2022.(b) Prepare all the relevant entries to record the sale of the furniture on 10 February 2022.

Here discuss with the hedge account in the difference in the currency fluctuation which are incurred…

Woody Limited, a furniture manufacturer, was afraid that the wood price would increase and consequently its gross profit margin would be lowered. To hedge against the risk, Woody Limited entered a wood future contract on 1 November 2021 and designated this contract as a cash flow hedge. The notional amount of the contract is for 250 board feet, and the terms of the contract give the company the right and the obligation to purchase wood at a preset price of $4,800 per board feet. The contract expires on 31 January 2022.

Woody Limited, a furniture manufacturer, was afraid that the wood price would increase and consequently its gross profit margin would be lowered. To hedge against the risk, Woody Limited entered a wood future contract on 1 November 2021 and designated this contract as a cash flow hedge. The notional amount of the contract is for 250 board feet, and the terms of the contract give the company the right and the obligation to purchase wood at a preset price of $4,800 per board feet. The contract expires on 31 January 2022.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 15E: On January 1, 2019, Piper Company entered into an agreement with Save-Mart to sell its most popular...

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