Pile, Incpurchased Merchandise for 500,000 FC from a Foreign Vendor on on November

question 57

Multiple Choice

Pile, Inc.purchased merchandise for 500,000 FC from a foreign vendor on November 30, 2020.Payment in foreign currency is due January 31, 2021.On the same day, Pile signed an agreement with a foreign exchange broker to buy 500,000 FC on January 31, 2021.Exchange rates to purchase 1 FC are as follows: ?

$$\begin{array} { l r r r } & \text { Nov. } 30,2020 & \text { Dec. } 31,2020 & \text { Jan. } 31,2021 \\\text { Spot } & \$ 1.49 & \$ 1.45 & \$ 1.44 \\30 \text { day } & \$ 1.48 & \$ 1.43 & \$ 1.43 \\60 \text { day } & \$ 1.46 & \$ 1.41 & \$ 1.42\end{array}$$ What will be the adjustment to the account payable included in the journal entry record on December 31, 2020?

• A)$20,000 debit
• B)$20,000 credit
• C)$30,000 debit
• D)$0

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Definitions:

Smart TV

A television set with integrated internet and interactive "Web 2.0" features allowing users to stream music and videos, browse the internet, and view photos.

Quantity Discount

A reduction in price given to customers who purchase large volumes of a product, incentivizing bulk purchases.

Financing Charges

The costs associated with borrowing money, including interest, service charges, and any other fees designated by the lender.

List Price

The manufacturer's suggested retail price for a product, before any discounts or allowances.