KidCo Bought Forward Contracts on 20,000 Bushels of Corn at $1.65

question 7

Multiple Choice

KidCo bought forward contracts on 20,000 bushels of corn at $1.65 per bushel.Corporate tax rates are 35.00%.Revenue is $100,000 and other costs are $60,000.Spot prices on corn are $1.75 per bushel.Calculate the after-tax net income.

• A) $7,000 loss
• B) $7,000 gain
• C) $4,550 loss
• D) $4,550 gain