The Balance in Newsprint Corp

question 23

Multiple Choice

The balance in Newsprint Corp.'s foreign exchange loss account was $10,000 on December 31, 2008, before any necessary year-end adjustment relating to the following:
(1) Newsprint had a $15,000 debit resulting from the restatement in dollars of the accounts of its wholly owned foreign subsidiary for the year ended December 31, 2008.
(2) Newsprint had an account payable to an unrelated foreign supplier, payable in the supplier's local currency unit (LCU) on January 15, 2009. The U.S. dollar-equivalent of the payable was $50,000 on the December 1, 2008, invoice date and $53,000 on December 31, 2008.
-Based on the information provided,in Newsprint's 2008 consolidated income statement,what amount should be included as foreign exchange loss in computing net income,if the U.S.dollar is the functional currency and the remeasurement method is appropriate?

• A)$15,000
• B)$10,000
• C)$25,000
• D)$28,000

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Definitions:

Formal Support Systems

Organized groups or institutions that provide social, emotional, or financial support services to individuals and families.

Caregivers

Individuals who provide care and support to family members, friends, or patients who are unable to look after themselves due to illness, disability, or age.

Physically Disabled

Individuals with limitations on their physical functioning, mobility, dexterity, or stamina.

Federal Employment Taxes

Taxes imposed by the federal government on employers and employees, including income tax withholding, Social Security, and Medicare taxes.