1. From the given data, Determine the effect on earnings due to the firm commitment used by the company in 2020.

Purchased goods on account from a foreign supplier costing FC2,500 on October 31, 2020 due on February 28, 2021 and entered into a forward contract to hedge this transaction on November 30, 2020. Obtained a non-cancelable sales order from a foreign customer amounting to FC5,000 for delivery on March 31, 2021. On October 31, 2020, the company entered into a forward contact to sell FC5,000 on March 31, 2021. Sold goods on account for FC3,500 on November 30, 2020 due on March 31, 2023. The following rates are available 10/31 11/30 12/31 1/31 2/28 3/31 Spot rates 5.90 6.00 6.25 5.70 5.80 5.75 5-month forward rate 7.20 7.35 7.45 6.90 6.85 6.85 4-month forward rate 7.00 7.15 7.20 7.05 6.95 6.80 3-month forward rate 6.85 7.00 7.18 6.88 6.77 6.66 2-month forward rate 6.35 6.55 6.93 6.58 6.43 6.42 1-month forward rate 6.25 6.37 6.45 6.41 6.23 6.18On December 1, 2018, SONY Company paid P10,000 to purchase a 90-day put option for FC500,000. The option's purpose is to hedge an exposed accounts receivable of FC500,000 from a sale of merchandise. The merchandise is to be shipped on December 1, 2018, payment for which is due on March 1, 2019. Relevant rates and market values at different dates are as follows; 12/01/2018 12/31/2018 03/01/2019 Spot rate (market price) P1.20 P1.11 P1.14 Strike price (exercise price) 1.20 1.20 1.20 Fair Value of Put Option P56,000