On April 1, 2012, Shannon Company, a U

question 72

Multiple Choice

On April 1, 2012, Shannon Company, a U.S. company, borrowed 100,000 euros from a foreign bank by signing an interest-bearing note due April 1, 2013. The dollar value of the loan was as follows: How much foreign exchange gain or loss should be included in Shannon's 2012 income statement?

• A) $3,000 gain.
• B) $3,000 loss.
• C) $6,000 gain.
• D) $6,000 loss.
• E) $7,000 gain.

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Definitions:

Ending Inventory

The total value of all inventory a company has in stock at the end of a fiscal period.

Beginning Inventory

The value of a company's inventory at the start of an accounting period; the starting point for determining inventory levels over a period.

Budgeted Purchases

The projected amount of goods or materials a company plans to buy over a certain period to meet its production needs.

Capital Expenditures Budget

A budget that plans and tracks the spending on long-term assets, such as buildings, machinery, and equipment.