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On February 1, 2020, when the spot rate was $1.00 per Swiss franc, Bluc Bogey Company (BBC) forecasted the purchase of component parts on May

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On February 1, 2020, when the spot rate was $1.00 per Swiss franc, Bluc Bogey Company (BBC) forecasted the purchase of component parts on May 1, 2020, at a price of 100,000 Swiss franes. On that date, BBC entered into a forward contract to purchase 100,000 Swiss franes on May 1, 2020, and designated the forward contract as a cash flow hedge of the forecasted transaction. The forward points are exeluded from the assessment of hedge effectiveness and are straight-line amortized on a monthly basis. On May 1, 2020, the forward contract was settled, and the component parts were received and paid for. The parts were used in the assembly of finished goods that were sold by June 30,2020 . BBC's trial balance at March 31 (end of the first quarter) reported the following amounts related to this cash flow hedge (credit balance in parentheses): Required Answer the following questions: 1. On February 1. 2020, was the Swiss frane selling at a discount or at a premium in the threemonth forward market? 2. On February 1. 2020, what was the U.S. dollar per Swiss franc forward rate to May 1, 2020? 3. On March 31, 2020, what was the U.S. dollar per Swiss frane forward rate to May 1, 2020? 4. What amount did BBC recognize as Cost of Goods Sold in the second quarter of 2020

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