Parker Corp

question 52

Multiple Choice

Parker Corp., a U.S. company, had the following foreign currency transactions during 2011:
(1.) Purchased merchandise from a foreign supplier on July 5, 2011 for the U.S. dollar equivalent of $80,000 and paid the invoice on August 3, 2011 at the U.S. dollar equivalent of $82,000.
(2.) On October 1, 2011 borrowed the U.S. dollar equivalent of $872,000 evidenced by a non-interest-bearing note payable in euros on October 1, 2011. The U.S. dollar equivalent of the note amount was $860,000 on December 31, 2011, and $881,000 on October 1, 2012.
-What amount should be included as a foreign exchange gain or loss from the two transactions for 2012?

• A) $9,000 loss.
• B) $9,000 gain.
• C) $11,000 loss.
• D) $21,000 loss.
• E) $21,000 gain.

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Definitions:

Situational Variables

Factors or conditions that can change and impact outcomes within different contexts or environments.

Organizational Levels

Refers to the hierarchy within an organization that includes various positions and responsibilities, ranging from executive management to frontline employees.

Incremental Improvements

Small, gradual enhancements or upgrades made to a process, product, or system over time.

Collective Learning

The process by which a group acquires new knowledge or skills through shared experiences and interactions.