On November 1, 2010, Dorsey Company sold inventory to a company in England. The sale was for 600,000 British pounds and payment will be received on February 1, 2011. On November 1, Dorsey entered into a forward contract to sell 600,000 British pounds on February 1 at the forward rate of $1.65. Spot rates for the British pound are as follows:

November 1$1.61

December 311.67

February 11.62

Dorsey has a December 31 fiscal year-end.

1.The dollars to be received on February 1, 2011, from selling the 600,000 pounds to the exchange dealer.