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What amount did bbc recognize as cost of goods sold

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Reference no: EM132927389

Question - On February 1, 2020, when the spot rate was $1.00 per Swiss franc, Blue Bogey Company (BBC) forecasted the purchase of component parts on May 1, 2020, at a price of 100,000 Swiss francs. On that date, BBC entered into a forward contract to purchase 100,000 Swiss francs on May 1, 2020, and designated the forward contract as a cash flow hedge of the forecasted transaction. The forward points are excluded from the assessment of hedge effectiveness and are straight-line amortized on a monthly basis. On May 1, 2020, the forward contract was settled, and the component parts were received and paid for. The parts were used in the assembly of finished goods that were sold by June 30, 2020.

BBC's trial balance at March 31 (end of the first quarter) reported the following amounts related to this cash flow hedge (credit balance in parentheses):

Trial Balance March 31, 2020

Forward contract (asset) $2,000

Cost of goods sold 6,000

Other comprehensive income (OCI) (8,000)

Total $-0-

Required - What amount did BBC recognize as Cost of Goods Sold in the second quarter of 2020?

Reference no: EM132927389

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