Use the Following Information to Answer the Question(s) Below

question 16

Multiple Choice

Use the following information to answer the question(s) below.

On October 4, 2014, Sooty Corporation borrowed 250,000 British pounds from a London bank, evidenced by an interest-bearing note payable due in one year. The note was payable in pounds. Exchange rates for pounds were:

-What exchange gain or loss appeared on Sooty's 2014 income statement?

• A)a loss of $10,000
• B)a loss of $15,000
• C)a gain of $10,000
• D)a gain of $15,000

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Definitions:

Intangibles

Assets that have no physical form but possess value, such as intellectual property or brand reputation.

Financial Assets

Economic resources or investments that are paper or digital, such as stocks, bonds, and bank deposits.

Exchange Rate

The worth of one currency when converted into another.

Gold

A precious metal used as an investment, a currency standard, and jewelry due to its perceived value and physical properties.