On September 30, we enter into a futures contract to hedge the value of gold which...
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On September 30, we enter into a futures contract to hedge the value of gold which we use on our manufacturing process and report on our balance sheet at $500,000. On December 31, the market value of gold had declined to $450,000. However, the futures contact that we had purchased increased in value by $45,000. a. b. How much net profit or loss will be recognized? Will this profit or loss be reflected in net income or other comprehensive income? On September 30, we enter into a futures contract to hedge the value of gold which we use on our manufacturing process and report on our balance sheet at $500,000. On December 31, the market value of gold had declined to $450,000. However, the futures contact that we had purchased increased in value by $45,000. a. b. How much net profit or loss will be recognized? Will this profit or loss be reflected in net income or other comprehensive income?
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