6.1 Derivative Accounting - the Normal Purchases and Normal Sales Scope Exception Facts: Albert, Inc. sells office supplies. Albert, Inc. is in the process of signing a contract for the purchase of 10 tons of softwood pulp, a timber product that is used in the production of paper products. Softwood pulp is traded on futures exchanges, such as the Chicago Mercantile Exchange (CME). Albert, Inc. will deliver this raw material to its paper producer in China. All paper produced using this raw material will be purchased by Albert, Inc. Delivery will occur in one year, for a price of $900 per ton, plus an adjustment based on the consumer price index (CPI). Required: Evaluate 1) whether Albert, Inc.'s purchase contract meets the definition of a derivative; and 2) whether the contract qualifies for the normal purchases and normal sales scope exemption to derivative accounting.