1. Cookie Company entered into a forward contract on November 1, 2016 to buy 2,000 pounds of butter from a supplier for $1,000 on January 31, 2017. On January 31, 2017, the butter had a fair market value of $900. The butter was consumed in cookies that were sold to the public on February 1, 2017. Which of the following reflects how Cookie Company would record this series of transactions

a.		The company would record a raw materials inventory of $1,000 on November 1, 2016
b.		The company would record a raw materials inventory of $1,000 on December 31, 2016
c.		The company would record a raw materials inventory of $900 on January 31, 2017
d.		The company would record other comprehensive income of $100 on December 31, 2016

2. Blue Co. purchased a speculative call option for $7,000 on September 1, 2016 to buy 30,000 shares of Red Co. by December 31, 2016 for $7 a share. On December 31, 2016, when the option was exercised, the fair market value of Red Co. was $9 per share. Which of the following would reflect how Yellow Co. would record this series of transactions

a.		Yellow Co. would report amortization of $7,000 per month of the call option beginning October 31, 2016.
b.		Yellow Co. would report a net gain of $53,000 on the transaction on December 31, 2016
c.		Yellow Co. would record investment in Red Co. at $210,000 on December 31, 2016
d.		Yellow Co. would record the call option as an amortizable asset at $7,000 on December 31, 2016

3. Pink Co. entered into a forward contract on January 1, 2017 to acquire specialized inventory for $12,000 on February 2, 2017. The cost of the specialized inventory increased to $13,000 on February 2, 2017. Pink Co. would record

a.		Inventory at $12,000 on February 2, 2017
b.		Inventory at $13,000 on February 2, 2017
c.		Inventory at $12,000 on January 1, 2017
d.		Inventory at $13,000 on January 1, 2017

4. Red Co. entered into a forward contract on January 1, 2017 to acquire specialized inventory for $12,000 on February 2, 2017. The inventory was sold on April 7, 2017. The cost of the specialized inventory decreased to $11,000 on February 2, 2017. Red Co. would record

a.		Other comprehensive loss of $1,000 on February 2, 2017
b.		Other comprehensive loss of $1,000 on January 1, 2017
c.		Other comprehensive loss of $1,000 on April 7, 2017
d.		Other comprehensive income of $1,000 on January 1, 2017

5. Orange Co. currently holds a 20 year $100,000 note with a fixed 10% interest rate entered into on January 1, 2016. On December 31, 2016, the current fixed rate for the same loan was 12%.

a.		Orange Co. has suffered an economic loss resulting from the increase in interest rates
b.		Orange Co. has experienced an economic gain resulting from the increase in interest rates
c.		Orange Co. must record an adjustment to reflect interest expense at the current rate
d.		Orange Co. would pay $12,000 of interest expense