Note: This Is a Kaplan CPA Review Question

question 57

Multiple Choice

Note: This is a Kaplan CPA Review Question
Hunt Co. purchased merchandise for 300,000 British pounds from a vendor in London on November 30, 20X1. Payment in British pounds was due on January 30, 20X2. The exchange rates to purchase one pound were as follows:
In its December 31, Year One, income statement, what amount should Hunt report as foreign exchange gain?

• A) $9,000
• B) $12,000
• C) $6,000
• D) $0

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Definitions:

Armature

The rotating coil or core of a generator or motor on which the winding is placed and electrical current is induced.

Driveshaft

A mechanical component for transmitting torque and rotation, usually used in vehicles to connect other components of the drivetrain that cannot be directly connected.

Pole Pieces

Components in an electric motor or generator that enhance the magnetic field produced by the winding.

Permanent Magnet Motors

Electric motors that utilize permanent magnets in the rotor to create a constant magnetic field, improving efficiency and reducing energy consumption.