Suppose One Year Ago,Hein Company Had Inventory in Britain Valued

question 92

Multiple Choice

Suppose one year ago,Hein Company had inventory in Britain valued at 229,000 pounds.The exchange rate for dollars to pounds was 1£ = 2.00 U.S.dollars.This year the exchange rate is 1£ = 1.82 U.S.dollars.The inventory in Britain is still valued at 229,000 pounds.What is the U.S.dollar gain or loss in inventory value as a result of the change in exchange rates?

• A) -$41,220.00
• B) -$50,700.60
• C) -$36,273.60
• D) -$47,403.00
• E) -$47,815.20

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Definitions:

Normal Balance

The side (debit or credit) on which increases to an account are recorded, based on the type of account.

Normal Balances

Refers to the side of an account (debit or credit) where increases in the account are recorded.

Accounts

Financial records that track the transactions and balances for specific items such as assets, liabilities, equity, revenue, and expenses.

Debit

An accounting entry that results in either an increase in assets or a decrease in liabilities or equity on a company's balance sheet.