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(Solved): As of January 2022, Cox Corp. anticipates purchasing 100,000 pounds of copper in April 2022. On Jan ...



As of January 2022, Cox Corp. anticipates purchasing 100,000 pounds of copper in April 2022. On January 1, 2022, Cox enters into a copper futures contract. Terms of the contract were as follows: Contract size: 100,000 pounds of copper Delivery price: $2.80 per pound Expiration: April 1, 2022 Spot prices for copper (per pound) over the contract period were the following: DateSpot priceJanuary 1, 2022$2.80March 31, 2022$3.20 On April 1, 2022, Cox Corp. purchased the needed 100,000 pounds of copper at the market price of $3.20 per pound. Cox also settled the futures contract on this date. On May 15, 2022, Cox Corp. sold the finished products. ASSUME THIS TRANSACTION QUALIFIES FOR HEDGE ACCOUNTING. Required: 1. Prepare the appropriate journal entry or entries related to transactions occurring in January 2022 through March 2022. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 2. Indicate any amounts that Cox Corp. would have included in its March 2022 quarterly balance sheet related to the futures contract. 3. Prepare the appropriate journal entry or entries related to transactions occurring in April 2022 through May 2022. In class we recorded COGS and reclassified Other Comprehensive income in one journal entry. In this problem, record the entry for COGS without reclassifying any OCI for the 3rd Journal entry and then in the 4th journal entry reclassify the OCI. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)



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