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On November 1 , 2 0 2 3 , Cheng Company ( a U . S . - based company ) forecasts the purchase of

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On November 1,2023, Cheng Company (a U.S.-based company) forecasts the purchase of goods from a foreign suppller for 130,000 yuan. Cheng expects to recelve the goods on April 30,2024, and make immediate payment. On November 1,2023, Cheng enters Into a six-month forward contract to buy 130,000 yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded In assessing hedge effectiveness and are amortized to net Income using a straight-line method on a monthly basis over the life of the contract. The following U.S. dollar-Yuan exchange rates apply:
\table[[,,Forward Rate (to],[Date,Spot Rate,April 30,2024)],[November 1,2023,$0.24,$0.225
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