1)

On 6/1/X2, an American firm purchased an inventory costing 100,000 Canadian Dollars from a Canadian firm to be paid for on 8/1/X2. Also on 6/1/X2, the American firm entered into a forward contract to purchase 100,000 Canadian dollars for delivery on 8/1/X2. The exchange rates were as follows:

	Spot	Forward
6/1/X2	1 CD = $0.73	1 CD = $0.74
6/30/X2	1 CD = $0.75	1 CD = $0.76
8/1/X2	1 CD = $0.68	1 CD = $0.68

The American firms fiscal year end is 6/30/X2. The changes in the value of the forward contract should be discounted at 12%. What is gain or loss that the American firm can recognize in its income statement on 6/30/X2?

2)

On January 1, 20X8, Parent Company purchased 75% of the common stock of Subsidiary Company for $360,000. On this date, Subsidiary had common stock, other paid in capital, and retained earnings of $20,000, $130,000, and $200,000, respectively. Any excess of cost over book value is due to goodwill. Parent accounts for the Investment in Subsidiary using cost method. On January 1, 20X8, Subsidiary sold $100,000 par value of 6%, ten-year bonds for $97,000. The bonds pay interest semi-annually on January 1 and July 1 of each year. On January 1, 20X9, Parent repurchased all of Subsidiary's bonds for $99,100. The bonds are still held on December 31, 20X9. Both companies have correctly recorded all entries relative to bonds and interest, using straight-line amortization for premium or discount. Calculate NCI's portion of consolidated net income for the year ended of December 31, 20X9. Round all computations to the nearest dollar