Spartan Company Purchased Interior Decoration Material from Egypt for 100,000

question 63

Multiple Choice

Spartan Company purchased interior decoration material from Egypt for 100,000 Egyptian pounds on September 5,20X8,with payment due on December 2,20X8.Additionally,on September 5,Spartan acquired a 90-day forward contract to purchase 100,000 Egyptian pounds of E£ = $.1850.The forward contract was acquired to manage the exposed net liability position in Egyptian pounds,but it was not designated as a hedge.The spot rates were:

-Based on the preceding information,in the entry made on December 2^nd to revalue foreign currency receivable to current equivalent U.S.dollar value,

• A)Accounts Payable will be debited for $18,350.
• B)Foreign Currency Units will be debited for $18,500.
• C)Foreign Currency Transaction Gain will be credited for $150.
• D)Other Comprehensive Income will be credited for $300.

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Definitions:

Internal Cause

A factor or motive originating within an individual or system that contributes to a particular outcome or action.

Distinctiveness

The quality of being easily distinguishable from others due to unique characteristics or features.

Consensus

A general agreement among the members of a group or community, often used in the context of decision-making processes.

Aptitude

A natural ability or skill that makes it easier for a person to learn or excel in a particular area.