Assume That on January 15, 2020, Ariel Agrees to Purchase

question 80

Multiple Choice

Assume that on January 15, 2020, Ariel agrees to purchase US$500,000 for C$550,000 for delivery on January 15, 2021. The exchange rate at its December 31 year-end is US$1 = C$0.95 and the January 15, 2021 the exchange rate is US$1 = C$0.97. What is the foreign exchange gain or loss recognized on January 15, 2020?

• A)0
• B)$65,000 loss.
• C)$75,000 gain.
• D)$75,000 loss.

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Definitions:

Cedar Shingles

Thin, tapered pieces of cedar wood used as durable roofing materials.

Net Operating Income

Income from a company's everyday business operations, excluding expenses from interest and taxes.

Monthly Sales

The total revenue generated from the sale of goods or services within a single month.

Advertising Budget

The amount of money a company decides to allocate towards advertising its products or brand over a certain period.