STARLA Company sold merchandise for 30,000 pounds to a customer in London on December 1, 2020. Payment in British pounds was due on March 31, 2021. On the same date, the company entered into a 120-day forward contract to sell 30,000 pounds to Central City Bank. Exchange rates for one pound on different dates are as follows: December 1 December 31 March 31 Spot rates 81.4 82.3 82.0 30-day forward 82.3 82.9 83.2 60-day forward 82.8 82.7 82.6 90-day forward 81.6 82.6 83.4 120-day forward 82.5 82.8 82.5 How much is the foreign exchange gain reported on December 31, 2020 Income Statement?
STARLA Company sold merchandise for 30,000 pounds to a customer in London on December 1, 2020. Payment in
British pounds was due on March 31, 2021. On the same date, the company entered into a 120-day forward contract to
sell 30,000 pounds to Central City Bank. Exchange rates for one pound on different dates are as follows:
December 1 December 31 March 31
Spot rates 81.4 82.3 82.0
30-day forward 82.3 82.9 83.2
60-day forward 82.8 82.7 82.6
90-day forward 81.6 82.6 83.4
120-day forward 82.5 82.8 82.5
How much is the foreign exchange gain reported on December 31, 2020 Income Statement?
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