1- Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:

DateSpot RateForward Rate to Jan.15December 16, 2021$0.00082$0.00089December 31, 20210.000800.00083January 15, 20220.000860.00086

Assuming a forward contract was not entered into, what would be the net impact on Jackson Corp.'s 2021 income statement related to this transaction?

Multiple Choice

• $600 (gain).
• $600 (loss).
• $400 (gain).
• $400 (loss).
• $0

2- Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:

DateSpot RateForward Rate to Jan.15December 16, 2021$0.00082$0.00089December 31, 20210.000800.00083January 15, 20220.000860.00086

Assuming a forward contract was entered into on December 16 as a fair value hedge, what would be the net foreign exchange gain or loss on Jackson's 2021 income statement related to this transaction? Jackson amortizes forward points using the straight-line method. Ignore present values.

Multiple Choice

• $0 (no impact).
• $200 (loss).
• $600 (gain).
• $800 (loss).
• $700 (gain).

3- On April 1, Quality Corporation, a U.S. company, expects to sell merchandise to a French customer in three months, denominating the transaction in euros. On April 1, the spot rate is $1.41 per euro, and Quality enters into a three-month forward contract cash flow hedge to sell 400,000 euros at a rate of $1.36. At the end of three months, the spot rate is $1.37 per euro, and Quality delivers the merchandise, collecting 400,000 euros. What amount will Quality recognize in Sales from these transactions?

Multiple Choice

• $0.
• $400,000.
• $544,000.
• $548,000.
• $564,000.