Gunther Co. established a subsidiary in Mexico on January 1, 2018. The subsidiary engaged in the following transactions during 2018: Jan. 1Sold common stock to Gunther for 5,000,000 pesos. Purchased inventory throughout the year, 8,000,000 pesos (¼ of the inventory remained at year end). Sales for the year totaled 12,000,000 pesos.Dec.31Purchased equipment for 1,000,000 pesos.??Gunther concluded that the subsidiary's functional currency was the dollar. Exchange rates for 2018 were:? Jan. 11peso=$0.20 311peso=$0.19Dec.311peso=$0.16Weighted average rate for the year1peso=$0.18??What amount of foreign exchange gain or loss would have been recognized in Gunther's consolidated income statement for 2018?
A. $440,000 loss.
B. $760,000 gain.
C. $280,000 loss.
D. $800,000 gain.
E. $320,000 loss.
Answer: C
You might also like to view...
Parties in conflict tend to fall into a psychological trap called the fundamental attribution error, which means they
A. have inflated their negotiating position to the point that there is no apparent zone of agreement. B. attempt to deal with differences in ideology by forcing their views on others. C. believe they can exercise coercive power to levy costs on the other party. D. tend to blame others when things go wrong but take personal credit for success.
What is a "penal code"?
A) The list of sentences for particular crimes B) The unwritten code of conduct among prison personnel C) The classification of a particular crime D) Another term used to describe a crime's degree, such as first degree or second degree E) A series of statutes that define precisely the conduct that is considered criminal
Identify a true statement about an S corporation.?
A. ?An S Corporation is required to have more than 100 stockholders. B. ?An S Corporation is required to have more than one type of stock outstanding. C. ?The income of an S Corporation passes through the company to the owners. D. ?The income of an S Corporation is taxed twice, at the corporate level and the owner level. E. ?The income of an S Corporation is taxed as capital gains to the owners.
A party who has conferred a benefit on someone else unnecessarily can invoke the principle of quasi contract to recover the cost
Indicate whether the statement is true or false