1.

On December 1, 2020 Bright Company estimates that 5,000 units of

inventory will be purchased from US supplies on March 1, 2021 for $2,000.
The transaction is probable and it is to be denominated in US dollars. Sales
of the inventory are expected to occur within the year.

On the same date, the company entered into a 90 day forward contract to
purchase
$2,000 on March 1, 2021
The exchange rates available on various dates are follows:

Spot rate P 52.00 P 52.45 P 52.20

30- day forward rate 52.10 52.50 52.35
60- day forwards rate 52.20 52.60 52.40
90- day forward rate 52.30 52.75 52.45

On march 1, 2021, the purchase transaction materialized 60% of inventory

items were sold for P 700,000 on June 30, 2021 while the remaining 40%
were sold for P 52,000 on September 30, 2021

How much is the gain or loss to be recognized in the income statement with
respect to the hedged item on March 1, 2021?

Answer: 0