On December 1, 20X8, Hedge Company entered into a 60-day spe…

On December 1, 20X8, Hedge Company entered into a 60-day speculative forward contract to sell 200,000 British pounds (£) at a forward rate of £1 = $1.78. On the same day it purchased a 60-day speculative forward contract to buy 100,000 euros (€) at a forward rate of €1 = $1.42. The rates are as follows: Hedge had no other speculation transactions in 20X8 and 20X9. Ignore taxes. Based on the preceding information, what is the net gain or loss on the euro speculative contract?

On December 1, 2014, Tuscano Corp. entered into a transactio…

On December 1, 2014, Tuscano Corp. entered into a transaction to import raw materials from a foreign company. The account is to be settled on February 1, 2015, with the payment of 60,000 foreign currency units (FCU). On December 1, 2014, Tuscano also entered into a forward contract to hedge the exposed position resulting from the import transaction. The forward rate is $0.71 per unit of foreign currency. Tuscano Corp. has a December 31 fiscal year-end. Spot rates and the forward rates on relevant dates were:             Date Spot Rate per Unit of Foreign Currency Forward Rate (Feb. 1 Settlement) December 1 $0.69 $0.71 December 31 $0.72 $0.715 February 1 $0.73 $0.73 What amount of net transaction gain or loss from the transaction should be included in the determination of the 2014 net income?                 

Hunt Co. purchased merchandise for 300,000 British pounds fr…

Hunt Co. purchased merchandise for 300,000 British pounds from a vendor in London on November 30, 20X1. Payment in British pounds was due on January 30, 20X2. The exchange rates to purchase one pound were as follows: In its December 31, Year One, income statement, what amount should Hunt report as foreign exchange gain?