Sterling Ltd. purchased a plant for US $ 20,000 on 31st December, 2011 payable after 4 months. The company entered into a forward contract for 4 months @ ~ 48.85 per dollar. On 31st December, 2011 the exchange rate was ~ 47.50 per dollar.
How will you recognise the profit or loss on forward contract in the books of Sterling Limited for the year ended 31st March, 2012 ?
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