8.

On October 30, 2020, a U.S. company receives a purchase order from a customer in Spain. Under the sale terms, the customer will pay the company 100,000 on April 30. On October 30, the U.S. company also enters a forward contract to sell 100,000 on April 30, 2021. The company delivers the merchandise to the customer on November 1. On April 30, the company receives 100,000 from the customer and sells it using the forward contract. The company's accounting year ends December 31. On November 1, 2020, the company reports sales revenue in the amount of:

Select one:

A. $124,500

B. $124,300

C. $124,800

D. $125,300

9. Refer to above company data.

What net gain or loss is recognized in 2020, in addition to sales revenue?

Select one:

A. $500 net gain

B. $500 net loss

C. $800 net loss

D. $800 net gain

10. On October 30, 2020, a U.S. company forecasts that it will purchase merchandise from an Italian supplier at the end of April 2021, in the amount of 100,000, and will pay the supplier on delivery. On October 30, the company enters a forward contract to buy 100,000 on April 30, 2021 and classifies it as a cash flow hedge of the forecasted purchase. On April 30, 2021, the company receives the merchandise, closes the forward contract and pays the supplier. The company's accounting year ends December 31. On December 31, 2020, how is the change in value of the forward contract reported?

Select one:

A. $200 gain, reported in other comprehensive income

B. $600 loss, reported in income

C. $200 gain, reported in income

D. $600 loss, reported in other comprehensive income

11. Please use the company information above.

When the merchandise is sold by the company, what is the cost of goods sold?

Select one:

A. $125,400

B. $125,000

C. $126,600

D. $126,000

Use the following information on the U.S. dollar value of the euro to answer the question. Forward Rate for Spot Rate April 30 2024 April 30, 2021 Delivery October 30, 2020 $ 1.230 $ 1.240 November 1, 2020 1.248 1.245 December 31, 2020 1.260 1.265 April 30, 2021 1.270 1.270 Use the following information on the U.S. dollar value of the euro to answer the question. Forward Rate for Spot Rate April 30, 2021 Delivery October 30, 2020 $ 1.250 $ 1.254 December 31, 2020 1.258 1.256 April 30, 2021 1.260 1.260