On November l, Year l, Alexandria Company sold merchandise to a foreign customer for 100,000 FC units with payment to be received on April 30, Year 2. At the date of sale, Alexandria Company entered into a six-month forward contract to sell 100,000 FC. The forward contract is properly designated as a cash flow hedge of a foreign currency receivable. Relevant exchange rates for the FC are:

Forward Rate Date Spot Rate (to April 30, Year 2) November 1, Year 1 .... . $0.23 $0.22 December 31, Year 1. .. ... . 0.20 0. 18 April 30, Year 2 .. ... . . . 0. 19