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Winston Corp

question 34

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?

Understand the impact of trade credit terms on payment amounts and timing.

Calculate the reorder point for inventory management to ensure adequate stock levels.

Determine the effective annual rate of trade discounts and penalties for late payments.

Understand the role of carrying and ordering costs in inventory management and their implications for business operations.

Definitions:

Hollywood Ten

A group of film directors and screenwriters who were blacklisted by Hollywood studios in the 1940s and 1950s after they refused to answer Congressional inquiries regarding their possible communist affiliations.

Constitutional Amendment

A formal change or addition proposed to the Constitution, requiring a specific process of approval and ratification.

Unfriendly Witnesses

Individuals called to testify in a legal setting who are either unwilling or hostile, making their testimonies potentially difficult to obtain or unreliable.

Motion Picture Association of America (MPAA)

Since the mid-1940s, the film industry’s principal trade organization. See also Motion Picture Producers and Distributors of America.