On November $1,2020,$ Cheng Company $($a U$.$S$.-$based company$)$ forecasts the purchase of goods from a foreign supplier for $330,000$ yuan. Cheng expects to receive the goods on April $30,2021,$ and make immediate payment. On November $1,2020,$ Cheng enters into a six$-$month forward contract to buy $330,000$ yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded in assessing hedge effectiveness and are amortized to net income using a straight$-$line method on a monthly basis over the life of the contract. The following U$.$S$.$ dollar$-$Yuan exchange rates apply:

As expected, Cheng receives goods from the foreign supplier on April $30,2021,$ and pays $330,000$ yuan immediately. Cheng sells the imported goods in the local market in May $2021.$

a$.$ Prepare all journal entries, including December $31$ adjusting entries, to record the foreign currency forward contract and import purchase.

b$.$ What is the impact on net income in $2020?$

c$.$ What is the impact on net income in $2021?$ Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Req A

Req B and C

b$.$ What is the impact on net income in $2020?$

c$.$ What is the impact on net income in $2021?$

$($Negative amounts should be entered with a minus sign. Do not round intermediate calculations.$)$