Winston Corp

question 93

Multiple Choice

Winston Corp., a U.S. company, had the following foreign currency transactions during 2011: (1.) Purchased merchandise from a foreign supplier on July 16, 2011 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2011 at the U.S. dollar equivalent of $54,000.
(2) ) On October 15, 2011 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2011. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2011, and $299,000 on October 15, 2012.
What amount should be included as a foreign exchange gain or loss from the two transactions for 2012?

• A) $1,000 loss.
• B) $1,000 gain.
• C) $2,000 loss.
• D) $4,000 gain.
• E) $4,000 loss.

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Definitions:

Cultural Values

The core principles and ideals upon which an entire community exists and functions, shaping its social behavior and practices.

Instrumental Value

The importance or worth of something based on its utility in achieving an end or serving as a means to facilitate a goal.

Rationality Strategy

An approach that emphasizes logical, systematic decision-making and problem-solving.

Gift Certificate

A pre-paid voucher that can be used as payment for goods or services at a specific retailer or establishment.