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Hard Wood Builders Ltd. uses fir 2x6 lumber as its framing material. On November 15, 2020, Hard Wood Builders enters into a forward contract for 1,500,000 board feet of lumber at $0.25 per board foot for March 2021 delivery. At December 31, 2020, the market price for March delivery is $0.26. On March 5, 2021, Hard Wood Builders took delivery of 1,500,000 board feet for $0.25 and settled the forward contract. The market rate on this date was $0.28 per board foot.

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