Alpha, Inc

question 68

Multiple Choice

Alpha, Inc., a U.S.company, had a receivable from a customer that was denominated in Mexican pesos.On December 31, 2017, this receivable for 75,000 pesos was correctly included in Alpha's balance sheet at $8,000.The receivable was collected on March 2, 2018, when the U.S.equivalent was $6,900.How much foreign exchange gain or loss will Alpha record on the income statement for the year ended December 31, 2018?

• A) $1,100 loss.
• B) $1,100 gain.
• C) $6,900 loss.
• D) $6,900 gain.
• E) $8,000 gain.

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Definitions:

Alluvial Fans

Fan or cone-shaped deposits of sediment crossed and built up by streams, typically found at the outlet of canyons.

Entrenched Meanders

River meanders that have cut deeply into the landscape, often in a canyon form, showing a history of flowing through a relatively stable channel for an extended period.

Distributaries

Branches of a river that flow away from its main course, typically seen in delta regions where the river splits into several smaller channels near its mouth.

Alluvial Fans

Cone-shaped deposits of sediment crossed and built up by streams, typically found at the base of mountain ranges where a river exits a steep valley.