Winston Corp

question 42

Multiple Choice

Winston Corp., a U.S. company, had the following foreign currency transactions during 2021:(1.) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the U.S. dollar equivalent of $54,000.(2.) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022.What amount should be included as a foreign exchange gain or loss from the two transactions for 2021?

• A) $9,000 loss.
• B) $9,000 gain.
• C) $11,000 loss.
• D) $13,000 gain.
• E) $14,000 gain.

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Definitions:

Intangible Rewards

Benefits or compensations that cannot be physically touched but are valued by individuals, such as recognition.

Prestige

The respect, admiration, or high status accorded to an individual, organization, or object based on their achievements, quality, or importance.

Indirect Order

A command or instruction delivered in a way that is not straightforward or direct.

Persuasive Messages

Communications designed to influence or convince the audience of a particular viewpoint, action, or decision through logical argument, emotional appeal, or credible assertion.