LOOSE-LEAF Advanced Financial Accounting with Connect
11th Edition
ISBN: 9781259605192
Author: Theodore E. Christensen
Publisher: McGraw-Hill Education
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Chapter 11, Problem 11.11.5E
To determine
Foreign exchange gain or loss: Foreign exchange gain or loss arises when there is selling or buying of any goods and services in foreign currency.
To choose: The correct option.
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Students have asked these similar questions
On July 1, 2020, Mifflin Company borrowed 200,000 euros from a foreign lender evidenced by an
interest-bearing note due on July 1, 2021. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows:
LO 9-2
LO 9-2
LO 9-2
LO 9-2, 9-3
Problems 1. Which of the following combinations correctly describes the relationship between foreign currency
transactions, exchange rate changes, and foreign exchange gains and losses?
LO 9-1
Type of Transaction Foreign Currency
Foreign Exchange
Gain or Loss
a. Export sale Appreciates Loss
b. Import purchase Appreciates Gain
c. Import purchase Depreciates Gain
d. Export sale Depreciates Gain
Date Amount
July 1, 2020 (date borrowed). . . . . . . . . . . . . . . . . . . . . . . . . $225,000
December 31, 2020 (Mifflin’s year-end). . . . . . . . . . . . . . . . 220,000
July 1, 2021 (date repaid). . . . . . . . . . . . . . . . . . . . . . . . . . . . 210,000
In its 2021 income statement, what amount should Mifflin include as a…
On October 2, 20X4, Duck Corporation borrowed 150,000 British pounds from a London bank, evidenced
by an interest-bearing note payable due in one year. The note was payable in pounds. Exchange rates for
pounds was:
October 2, 20X4
$1.60
December 31, 20X4
$1.62
October 2, 20X5
$1.56
What exchange gain or loss appeared on Duck's 20X4 income statement?
O a. a gain of $3,000
O b. a gain of $6,000
a loss of $6,000
O d. a loss of $3,000
Matthias Corp. had the following foreign currency transactions during 2020:
Purchased merchandise from a foreign supplier on January 20 for the U.S. dollar equivalent of $63,200 and paid the invoice on April 20 at the U.S. dollar equivalent of $51,400.
On September 1, borrowed the U.S. dollar equivalent of $304,000 evidenced by a note that is payable in the lender's local currency in one year. On December 31, the U.S. dollar equivalent of the principal amount was $326,000.
In Matthias’s 2020 income statement, what amount should be included as a net foreign exchange gain or loss?
Multiple Choice
$10,200 loss
$22,000 gain
$33,800 loss
$11,800 gain
Chapter 11 Solutions
LOOSE-LEAF Advanced Financial Accounting with Connect
Ch. 11 - Prob. 11.1QCh. 11 - Prob. 11.2QCh. 11 - The U.S. dollar strengthened against the European...Ch. 11 - Prob. 11.4QCh. 11 - Prob. 11.5QCh. 11 - How are assets and liabilities denominated in a...Ch. 11 - Prob. 11.7QCh. 11 - Prob. 11.8QCh. 11 - Prob. 11.9QCh. 11 - Distinguish between an exposed net asset position...
Ch. 11 - Prob. 11.11QCh. 11 - Prob. 11.12QCh. 11 - Effects of Changing Exchange Rates Analysis Since...Ch. 11 - Prob. 11.2CCh. 11 - Prob. 11.5CCh. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Basic Understanding of Foreign Exposure The...Ch. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Prob. 11.7ECh. 11 - Adjusting Entries for Foreign Currency Balances...Ch. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11.1ECh. 11 - Prob. 11.11.2ECh. 11 - Prob. 11.11.3ECh. 11 - Prob. 11.11.4ECh. 11 - Prob. 11.11.5ECh. 11 - Prob. 11.11.6ECh. 11 - Prob. 11.11.7ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14.1ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.3ECh. 11 - Prob. 11.14.4ECh. 11 - Prob. 11.14.5ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.7ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16AECh. 11 - Prob. 11.17ECh. 11 - Prob. 11.18ECh. 11 - Prob. 11.19.1ECh. 11 - Prob. 11.19.2ECh. 11 - Prob. 11.19.3ECh. 11 - Prob. 11.19.4ECh. 11 - Prob. 11.19.5ECh. 11 - Prob. 11.20.1PCh. 11 - Prob. 11.20.2PCh. 11 - Prob. 11.20.3PCh. 11 - Prob. 11.20.4PCh. 11 - Prob. 11.20.5PCh. 11 - Foreign Sales Tex Hardware sells many of its...Ch. 11 - Prob. 11.22PCh. 11 - Prob. 11.23APCh. 11 - Prob. 11.24.1PCh. 11 - Prob. 11.24.2PCh. 11 - Prob. 11.25PCh. 11 - Prob. 11.26PCh. 11 - Prob. 11.27B.1PCh. 11 - Prob. 11.27B.2PCh. 11 - Prob. 11.27B.3PCh. 11 - Prob. 11.27B.4PCh. 11 - Prob. 11.27B.5PCh. 11 - Prob. 11.27B.6PCh. 11 - Prob. 11.28BPCh. 11 - Prob. 11.29BPCh. 11 - Matching Key Terms Match the items in the lefthand...Ch. 11 - Prob. 11.31P
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