On December 1, 20X1, Sycamore Company acquired a 90 -day speculative forward contract to sell 120.000 German marks (DM) at a forward rate of DM \(1=\$ .58\). The rates are as follows:

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a. Prepare a schedule showing the effects of this speculation on \(20 \mathrm{X} 1\) income before income taxes.

b. Prepare a schedule showing the effects of this speculation on \(20 \times 2\) income before income taxes.

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Date December 1. 20X1 Spot Rate DM 1 = $.60 December 31. 20X1 March 1, 20X2 DM 1 = .59 DM 1 57 Forward Rate for March 1 DM 1 = $.58 DM 1 = .56