56. What is the gross profit to be reported by the Filipino entity for the year ended December 31, 2020?
56. What is the gross profit to be reported by the Filipino entity for the year ended December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On July 1, 2020, a Filipino entity whose functional currency is Philippine Peso purchased on account
inventories at a cost of $100 to be paid on June 30, 2021. On October 1, 2020, the said inventories were
soid on account by the Filipino entity at a selling price of $150 to be collected on September 30, 2021.
The following direct foreign exchange rates are given:
July 1,2020
October 1, 2020
December 31, 2020
Buying Spot
P40
P42
P45
Selling Spot
P50
P48
P52
56. What is the gross profit to be reported by the Filipino entity for the year ended December 31, 2020?
a. 1,300
b. 2,100
c. 2,400
d. 3,200
57. what is the net foreign currency gain or loss for the year ended December 31, 2020?
a. 150 net gain
b. 250 net gain
c. (350) net loss
d. (50) net loss](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0077dd94-db27-46d8-bc5a-cb6792cefb76%2F0035bd41-0dbf-490f-80fa-da6679c8482a%2Fli8jwwa_processed.png&w=3840&q=75)
Transcribed Image Text:On July 1, 2020, a Filipino entity whose functional currency is Philippine Peso purchased on account
inventories at a cost of $100 to be paid on June 30, 2021. On October 1, 2020, the said inventories were
soid on account by the Filipino entity at a selling price of $150 to be collected on September 30, 2021.
The following direct foreign exchange rates are given:
July 1,2020
October 1, 2020
December 31, 2020
Buying Spot
P40
P42
P45
Selling Spot
P50
P48
P52
56. What is the gross profit to be reported by the Filipino entity for the year ended December 31, 2020?
a. 1,300
b. 2,100
c. 2,400
d. 3,200
57. what is the net foreign currency gain or loss for the year ended December 31, 2020?
a. 150 net gain
b. 250 net gain
c. (350) net loss
d. (50) net loss
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