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Case 1 [10 marks] Hedge Accounting Zohra Company, a Spanish exporter of specialty olive oil, made the following sale of 5,000 cases of olive oil to Steve Co, a UK importer, at a price of 5 per case. The total sales amount is 25,000. Relevant exchange rates are as follows: The helow tahle noovides the changes in fair values of the forward contract: The below table provides the changes in fair values of the option: 1. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this export sales in the books of Zohra Company. 2. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. On March 1, Zohra Company entered into a seven-month forward contract to sell 25,000. The forward contract is properly designated as a fair value hedge of a foreign currency. Prepare journal entries to account for the export sales and foreign currency forward contract in the books of Zohra Company. 3. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. On March 1, Zohra Company entered into a seven-month forward contract to sell 25,000. The forward contract is properly designated as a cash flow hedge of a foreign currency. Prepare journal entries to account for the export sales and foreign currency forward contract in the books of Zohra Company. 4. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. On March 1, Zohra Company purchased a seven-month put option for 25,000. The option was properly designated as a cash flow hedge of a foreign currency receivable. Prepare journal entries to account for the export sales and foreign currency option in the books of Zohra Company. Case 1 [10 marks] Hedge Accounting Zohra Company, a Spanish exporter of specialty olive oil, made the following sale of 5,000 cases of olive oil to Steve Co, a UK importer, at a price of 5 per case. The total sales amount is 25,000. Relevant exchange rates are as follows: The helow tahle noovides the changes in fair values of the forward contract: The below table provides the changes in fair values of the option: 1. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. There was no attempt to hedge the exposure to foreign exchange risk. Prepare journal entries to account for this export sales in the books of Zohra Company. 2. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. On March 1, Zohra Company entered into a seven-month forward contract to sell 25,000. The forward contract is properly designated as a fair value hedge of a foreign currency. Prepare journal entries to account for the export sales and foreign currency forward contract in the books of Zohra Company. 3. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. On March 1, Zohra Company entered into a seven-month forward contract to sell 25,000. The forward contract is properly designated as a cash flow hedge of a foreign currency. Prepare journal entries to account for the export sales and foreign currency forward contract in the books of Zohra Company. 4. Assume the olive oil was delivered on March 1, 2022, and cash was received on September 30, 2022. On March 1, Zohra Company purchased a seven-month put option for 25,000. The option was properly designated as a cash flow hedge of a foreign currency receivable. Prepare journal entries to account for the export sales and foreign currency option in the books of Zohra Company

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