The Balance in Newsprint Corp

question 38

Multiple Choice

The balance in Newsprint Corp.'s foreign exchange loss account was $10,000 on December 31,20X8,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 31,20X8.
(2) Newsprint had an account payable to an unrelated foreign supplier,payable in the supplier's foreign currency unit on January 15,20X9.The U.S.dollar-equivalent of the payable was $50,000 on the December 1,20X8,invoice date and $53,000 on December 31,20X8.
-Based on the information provided,in Newsprint's 20X8 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:

Symptomatic Behavior

Actions or manifestations that are indicative of an underlying psychological condition or issue.

Object Relations Theorists

Psychologists who study how people form representations of others and relationships based on early caregiving experiences.

Early Caregivers

These are the primary individuals, often parents or guardians, responsible for a child's basic needs and development during the early years of life.

Avoidant

Referring to a pattern of behavior characterized by avoidance of emotional intimacy or distressing situations.