Reference no: EM132993132

Question - Irving plc purchases some inventory from Durant SE for EUR 1 million on 7/1/21. Irving uses the GBP as its reporting currency. Irving buys the inventory on credit and pays the EUR 1 million on 11/1/21. Irving enters into a forward contract at 7/1/21 to exchange GBP 855706 for EUR 1 million on 11/1/21. The forward is treated as a cash flow hedge and has a fair value of GBP 19253 at 9/30/21 (you decide if it's an asset or liability based on the evidence). Irving's fiscal year ends on 9/30.

Spot exchange rates on various dates (1 EUR = x GBP):

7/1/21 0.867

9/30/21 0.874

11/1/21 0.869

1. How much is inventory debited or credited on 7/1/21? (Give positive number for debit, negative number for credit, and zero for no entry.

2. How much is forward contract debited or credited on 7/1/21? (Give positive number for debit, negative number for credit, and zero for no entry.)

3. How much is accounts payable debited or credited on 9/30/21 (all entries combined)? (Give positive number for debit, negative number for credit, and zero for no entry.)

4. How much is forward contract debited or credited on 9/30/21 (all entries combined)? (Give positive number for debit, negative number for credit, and zero for no entry.)