On December 1, 2014, Tuscano Corp. entered into a transactio…
On December 1, 2014, Tuscano Corp. entered into a transaction to import raw materials from a foreign company. The account is to be settled on February 1, 2015, with the payment of 60,000 foreign currency units (FCU). On December 1, 2014, Tuscano also entered into a forward contract to hedge the exposed position resulting from the import transaction. The forward rate is $0.71 per unit of foreign currency. Tuscano Corp. has a December 31 fiscal year-end. Spot rates and the forward rates on relevant dates were: Date Spot Rate per Unit of Foreign Currency Forward Rate (Feb. 1 Settlement) December 1 $0.69 $0.71 December 31 $0.72 $0.715 February 1 $0.73 $0.73 What amount of net transaction gain or loss from the transaction should be included in the determination of the 2014 net income?