On December 1, 2018, BEN RICHARDS Company entered into three independent forward contracts to purchase US$1,200 in 90 days for delivery on March 1, 2019. The exchange rates available on various dates are as follows:

	Dec. 1	Dec. 31	Mar. 1
	2018	2018	2019
Selling spot rate	40.00	40.30	40.10
Buying spot rate	39.60	40.00	39.90
30-day forward selling rate	40.05	40.25	40.30
30-day forward buying rate	39.65	39.90	40.00
60-day forward selling rate	40.10	40.20	40.40
60-day forward buying rate	39.70	39.50	40.10
90-day forward selling rate	40.15	40.15	40.50
90-day forward buying rate	39.75	39.70	40.20

Determine the following

Gain or loss on derivative instrument on 2018 income statement

Group of answer choices

300 gain

60 gain

300 loss

60 loss

CONTRACT NO. 1

BEN RICHARDS entered into the first forward contract on December 1, 2018 to sell US$1,200 for speculative purposes in anticipation for a gain. The currencies are to be delivered on March 1, 2019.

The amount (in peso) the entity will receive from the broker on March 1, 2019.

Group of answer choices

47,880

47,700

48,120

48,180

CONTRACT NO. 2

On December 1, 2018, BEN RICHARDS sold inventory for US$1,200 payable on March 1, 2019. The customer will settle the transaction in US Dollars. Also, on the same date, the company entered into the second contract to sell US$1,200 on March 1, 2019.

Gain or loss on hedging on 2019 income statement.

Group of answer choices

120 loss

120 gain

480 loss

480 gain