Business, 12.08.2019 21:30 22savage2017

On september 30 of the current year, a u. s. company entered into a futures contract to hedge the value of itsinventory. the inventory was reported on the balance sheet at its cost of $250,000 on september 30. ondecember 31, the market value of the inventory had decreased to $175,000. the entity had a gain of$74,500 on the futures contract at december 31. what is the proper accounting for this hedging transactionon the december 31 year-end financial statements, assuming that the hedge is considered to be highlyeffective? a. other comprehensive income will increase by $74,500.b. other comprehensive income will decrease by $500.c. net income will increase by $74,500.d. net income will decrease by $500.

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On september 30 of the current year, a u. s. company entered into a futures contract to hedge the va...