On March 1,20X2,McBride Ltd.issued a purchase order to Tao Heavy Machines (Singapore)Inc.to acquire a drilling machine for $400,000 SGD.On the same day,McBride entered into a forward contract to receive $400,000 SGD on July 31,20X2.The machine was delivered on June 1,20X2 and payment was made July 31,20X2.McBride has an April 30 year-end.The following information has been provided:

Assume that the transaction qualifies as a cash-flow hedge.What amount should be recognized as other comprehensive income at April 30,20X2?
A)$ 320
B)$ 640
C)$4,640
D)$5,280

Question

On March 1,20X2,McBride Ltd.issued a purchase order to Tao Heavy Machines (Singapore) Inc.to acquire a drilling machine for $400,000 SGD.On the same day,McBride entered into a forward contract to receive $400,000 SGD on July 31,20X2.The machine was delivered on June 1,20X2 and payment was made July 31,20X2.McBride has an April 30 year-end.The following information has been provided:

Assume that the transaction qualifies as a cash-flow hedge.What amount should be recognized as other comprehensive income at April 30,20X2?

Assume that the transaction qualifies as a cash-flow hedge.What amount should be recognized as other comprehensive income at April 30,20X2?
A)$ 320 
B)$ 640 
C)$4,640 
D)$5,280

Quizplus · Accepted Answer

The Answer of On March 1,20X2,McBride Ltd.issued a purchase order to Tao Heavy Machines (Singapore)Inc.to acquire a drilling machine for $400,000 SGD.On the same day,McBride entered into a forward contract to receive $400,000 SGD on July 31,20X2.The machine was delivered on June 1,20X2 and payment was made July 31,20X2.McBride has an April 30 year-end.The following information has been provided:

Assume that the transaction qualifies as a cash-flow hedge.What amount should be recognized as other comprehensive income at April 30,20X2?
A)$ 320 
B)$ 640 
C)$4,640 
D)$5,280