Taste Bits Inc

question 9

Multiple Choice

Taste Bits Inc.purchased chocolates from Switzerland for 200,000 Swiss francs (SFr) on December 1,2008.Payment is due on January 30,2009.On December 1,2008,the company also entered into a 60-day forward contract to purchase 100,000 Swiss francs.The forward contract is not designated as a hedge.The rates were as follows:

-Based on the preceding information,the entries on December 31,2008,include a:

• A)Credit to Foreign Currency Payable to Exchange Broker,$4,000.
• B)Debit to Foreign Currency Receivable from Exchange Broker,$6,000.
• C)Debit to Foreign Currency Receivable from Exchange Broker,$186,000.
• D)Debit to Foreign Currency Transaction Gain,$4,000.

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Definitions:

Unrelated

Not connected or associated with each other in any identifiable or significant way.

Multistep Synthesis

A complex reaction involving multiple sequential steps to produce a desired product.

Reagents

Substances or mixtures used in chemical reactions to bring about a chemical change or detect a chemical property.

1-Methylcyclohexanol

An organic compound featuring a cyclohexane ring with a methyl and an alcohol group attached, used in various chemical syntheses.