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?