Winston Corp

question 71

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 2011?

• A) $9,000 loss.
• B) $9,000 gain.
• C) $11,000 loss.
• D) $13,000 gain.
• E) $14,000 gain.

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Definitions:

Indirect Values

Benefits provided by ecosystems that do not have a direct economic value, such as climate regulation and cultural significance.

Biodiversity

The variety of plant and animal life in the world or in a particular habitat, considered important for maintaining ecological balance.

Trees

Perennial plants with an elongated stem, or trunk, supporting branches and leaves in most species.

Erosion

Erosion is the process by which natural forces like water, wind, or ice wear away land surfaces, transporting the materials from one location to another.