On November 1, 2020, Cheng Company (a U.S.-based company) forecasts the purchase of goods from a foreign supplier for 210,000 yuan. Cheng expects to receive the goods on April 30, 2021, and make immediate payment. On November 1, 2020, Cheng enters into a six-month forward contract to buy 210,000 yuan. The company properly designates the forward contract as a cash flow hedge of a forecasted foreign currency transaction. Forward points are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis over the life of the contract. The following U.S. dollar-Yuan exchange rates apply: Date November 1, 2020 December 31, 2020 April 30, 2021 Spot Rate $ 0.32 0.31 0.29 Forward Rate (to April 30, 2021) $0.305 0.280 N/A As expected, Cheng receives goods from the foreign supplier on April 30, 2021, and pays 210,000 yuan immediately. Cheng sells the

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