On September 1, 2014, Mudd Plating Company Entered into Two

question 1

Multiple Choice

On September 1, 2014, Mudd Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days.The relevant exchange rates are as follows: The first forward contract was to hedge a purchase of inventory on September 1, payable on December 1.On September 30, what amount of foreign currency transaction loss should Mudd Plating report in income?

• A)$0.
• B)$2,500.
• C)$5,000.
• D)$10,000.

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Definitions:

Urogenital Folds

Embryonic structures that contribute to the development of the external genitalia in both males and females.

Labioscrotal Swellings

Paired swellings formed by the genital tubercle and lying on either side, which eventually develop into either the scrotum in males or the labia majora in females during fetal development.

Respiratory Distress Syndrome

A medical condition characterized by severe respiratory dysfunction, commonly seen in premature infants or adults with damaged lung function.

Surfactant

Lipoproteins forming a monomolecular layer over pulmonary alveolar surfaces; stabilizes alveolar volume by reducing surface tension and the tendency for the alveoli to collapse.