Assume That on January 15, 2021 Aero's Agrees to Purchase

question 1

Multiple Choice

Assume that on January 15, 2021 Aero's agrees to purchase US$50,000 for C$52,000 for delivery on January 15, 2022. The exchange rate at Aero's December 31 year-end is US$1 = C$.98 and the January 15, 2022 exchange rate is US$1 = C$.97. What is the foreign exchange gain or loss recognized at December 31, 2021?

• A)$3,000 loss.
• B)$3,000 gain.
• C)$3,500 loss.
• D)$3,500 gain.

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Definitions:

Delegation

The act of transferring authority or responsibility from one individual or group to another while retaining overall accountability.

Valid Delegation

The legal transfer of authority from one party to another, where the delegating party retains the responsibility for the task.

Delegator

A person or entity that assigns tasks or authority to another.

Delegatee

An individual or organization that has been delegated authority or tasks by another, known as the delegator.