Hull Manufacturing Corp. (HMC), a Canadian company, manufactures instruments used to measure the moisture content of barley and wheat. The company sells primarily to the domestic market, but in Year 3, it developed a small market in Argentina. In Year 4, HMC began purchasing semi-finished components from a supplier in Romania. The management of HMC is concerned about the possible adverse effects of foreign exchange fluctuations. To deal with this matter, all of HMC's foreign-currency-denominated receivables and payables are hedged with contracts with the company's bank. The year-end of HMC is December 31. The following transactions occurred late in Year 4: . On October 15, Year 4, HMC purchased components from its Romanian supplier for 812,000 Romanian leus (RL). On the same day, HMC entered into a forward contract for RON812,000 at the 60-day forward rate of RON1 $0.420. The Romanian supplier was paid in full on December 15, Year 4. . On December 1, Year 4, HMC made a shipment to a customer in Argentina. The selling price was 2,512,000 Argentinean pesos (ARS), with payment to be received on January 31, Year 5. HMC immediately entered into a forward contract for ARS2,512,000 at the two-month forward rate of ARS1 = $0.238. During this period, the exchange rates were as follows: October 15, Year 4 December 1, Year 4 Spot Rates RONI $0.407 ARS1 -0.261 Forward Rates