Woolsey Corporation, a U

question 75

Multiple Choice

Woolsey Corporation, a U.S. company, expects to sell goods to a British customer at a price of 250,000 pounds, with delivery and payment to be made on October 24, 2021. On July 24, 2021, Woolsey purchased a three-month put option for 250,000 British pounds and designated this option as a cash flow hedge of a forecasted foreign currency transaction expected to be completed in late October, 2021. The following exchange rates apply: What amount will Woolsey include as Adjustment to Net Income for the period ended October 31?

• A)$6,000 positive.
• B)$6,000 negative.
• C)$10,000 positive.
• D)$10,000 negative.
• E)$14,000 positive.

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Definitions:

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