Krisco Bricks purchases raw material from its foreign supplier, Olivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Krisco's fiscal year-end. The pertinent exchange rates were as follows: Date May 8 May 31 June 7 Exchange Rate $ Spot rate Spot rate Spot rate 1.25 1.24 1.20 Required: What amount of foreign exchange gain or loss should be recorded on June 7? $80,000 gain. $2000 loss. O $80,000 loss. $100,000 gain.
Krisco Bricks purchases raw material from its foreign supplier, Olivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Krisco's fiscal year-end. The pertinent exchange rates were as follows: Date May 8 May 31 June 7 Exchange Rate $ Spot rate Spot rate Spot rate 1.25 1.24 1.20 Required: What amount of foreign exchange gain or loss should be recorded on June 7? $80,000 gain. $2000 loss. O $80,000 loss. $100,000 gain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject :- Accounting
Transcribed Image Text:Krisco Bricks purchases raw material from its foreign supplier, Olivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is
due in 30 days. May 31 is Krisco's fiscal year-end. The pertinent exchange rates were as follows:
Date
May 8
May 31
June 7
Exchange Rate $
Spot rate
Spot rate
Spot rate
1.25
1.24
1.20
Required: What amount of foreign exchange gain or loss should be recorded on June 7?
O $80,000 gain.
$2000 loss.
$80,000 loss.
$100,000 gain
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