Kim Manufacturing purchased on credit £20,000 worth of parts from a British company when the exchange rate was $1.66 per British pound. At the year-end balance sheet date, the exchange rate increased to $1.69. Kim must record a gain of $600. 

Answer the following statement true (T) or false (F)


False


      
Value of liability at date of purchase:£20,000 × $1.66/£ = $33,200 
Value of liability at balance sheet date:£20,000 × $1.69/£ =  33,800 
Loss  $600 

Business

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