Problem 2:

On December 1, 2018, BEEN RICHARDS Company entered into two independent forward contracts to sell US$1,200 in 90 days or 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

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.

Determine the following:

The amount of sales to be recorded in December 1, 2018.

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.