Parker Corp

question 76

Multiple Choice

Parker Corp., a U.S. company, had the following foreign currency transactions during 2013:
(1) ) Purchased merchandise from a foreign supplier on July 5, 2013 for the U.S. dollar equivalent of $80,000 and paid the invoice on August 3, 2013 at the U.S. dollar equivalent of $82,000.
(2) ) On October 1, 2013 borrowed the U.S. dollar equivalent of $872,000 evidenced by a non-interest-bearing note payable in euros on October 1, 2013. The U.S. dollar equivalent of the note amount was $860,000 on December 31, 2013, and $881,000 on October 1, 2014.
What amount should be included as a foreign exchange gain or loss from the two transactions for 2013?

• A) $2,000 loss.
• B) $2,000 gain.
• C) $10,000 gain.
• D) $14,000 loss.
• E) $14,000 gain.

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Definitions:

Ludus

in the context of love, refers to a playful, uncommitted love style that values fun and freedom over deep emotional attachment.

Casual

Describing something that is relaxed and unconcerned, or an event or clothing that is informal.

Pragma

A term from Greek that refers to a practical, utilitarian kind of love within relationships.

Businesslike Approach

A method characterized by efficiency, formality, and a focus on achieving specific objectives or outcomes.