On 8/3/06, Salorc Obtained a Noncancelable Sales Order from a Norwegian

Essay

On 8/3/06, Salorc obtained a noncancelable sales order from a Norwegian customer for a chip-making machine. The contract price was 1,000,000 Nor-wegian krona. Concurrently, Salorc entered into a 180-day FX forward to sell 1,000,000 Norwegian krona at the forward rate of $.144. Salorc delivered the machinery on 12/1/06 and received payment on 1/30/07 via a bank wire transfer. Direct exchange rates for Norwegian krona are as follows:
Required:
a. Prepare a partial balance sheet for Salorc at 12/31/06.
b. Prepare a partial income statement for Salorc for 2006.