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[The following information applies to the questions displayed below.] Select the correct answer for each of the following questions. Note: Items 3 through 5 are based on the following: On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows:

	Spot Rate				Forward Rate for March 12, 20X6
December 12, 20X5		$	0.88			$	0.90
December 31, 20X5			0.98				0.93

2. On September 1, 20X5, Johnson Inc. entered into a foreign exchange contract for speculative purposes by purchasing 50,000 for delivery in 60 days. The rates to exchange U.S. dollars for euros follow:

	9/1/X5				9/30/X5
Spot rates		$	0.75			$	0.70
30-day forward rate			0.73				0.72
60-day forward rate			0.74				0.73

In its September 30, 20X5, income statement, what amount should Johnson report as foreign exchange loss?

multiple choice

$500

$1,500

$2,500

$1,000

Required information [The following information applies to the questions displayed below.] Select the correct answer for each of the following questions. Note: Items 3 through 5 are based on the following: On December 12, 20X5, Dahl Company entered into three forward exchange contracts, each to purchase 100,000 francs in 90 days. The relevant exchange rates are as follows: 2. On September 1, 205, Johnson Inc. entered into a foreign exchange contract for speculative purposes by purchasing 50,000 fo delivery in 60 days. The rates to exchange U.S. dollars for euros follow: In its September 30, 20X5, income statement, what amount should Johnson report as foreign exchange loss? $500$1,500$2,500$1,000