On April 1, 2012, Shannon Company, a U How Much Foreign Exchange Gain or Loss Should Be Included

question 78

Multiple Choice

On April 1, 2012, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2013. The dollar value of the loan was as follows: $\begin{array}{|l|l|}\hline {\text { Date }} & \text { Amount } \\\hline \text { April 1,2012 } & \$ 97,000 \\\hline \text { December 31,2012 } & \$ 103,000 \\\hline \text { April 1,2013 } & \$ 105,000 \\\hline\end{array}$ How much foreign exchange gain or loss should be included in Shannon's 2012 income statement?

• A)$3,000 gain.
• B)$3,000 loss.
• C)$6,000 gain.
• D)$6,000 loss.
• E)$7,000 gain.

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Definitions:

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize nutrients from carbon dioxide and water, generating oxygen as a byproduct.

Species Diversity

The variety of different species of animals, plants, fungi, and microorganisms that exist within a particular ecological community or ecosystem.

Deforestation

The removal of a forest or stand of trees where the land is thereafter converted to a non-forest use such as agriculture or urban development.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration, considered a greenhouse gas contributing to global warming.