McCarthy, Incorporated's Brazilian subsidiary borrowed 125,000 euros on January 1, 2024. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: January 1, 2024 Average, 2024 BRL per € BRL 4.20 US$ per BRL $ 0.28 BRL 4.30 $ 0.25 December 31, 2024 BRL 4.60 $ 0.20 Required: a. Determine the amount at which the Brazilian subsidiary's euro note payable should be reported on McCarthy's December 31, 2024, consolidated balance sheet? b. Determine the amount of foreign exchange gain or loss that should be reflected in McCarthy's 2024 consolidated net income. a. Note Payable b. Foreign Exchange

McCarthy, Incorporated's Brazilian subsidiary borrowed 125,000 euros on January 1, 2024. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: January 1, 2024 Average, 2024 BRL per € BRL 4.20 US$ per BRL $ 0.28 BRL 4.30 $ 0.25 December 31, 2024 BRL 4.60 $ 0.20 Required: a. Determine the amount at which the Brazilian subsidiary's euro note payable should be reported on McCarthy's December 31, 2024, consolidated balance sheet? b. Determine the amount of foreign exchange gain or loss that should be reflected in McCarthy's 2024 consolidated net income. a. Note Payable b. Foreign Exchange

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter10: Measuring Exposure To Exchange Rate Fluctuations

Section: Chapter Questions

Problem 1IEE

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McCarthy, Incorporated's Brazilian subsidiary borrowed 125,000 euros on January 1, 2024, Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: January 1, 2024 Average, 2024 December 31, 2024 Required: BRL per € BRL 4.20 US$ per BRL $ 0.28 BRL 4.30 $ 0.25 BRL 4.60 $ 0.20 a. Determine the amount at which the Brazilian subsidiary's euro note payable should be reported on McCarthy's December 31, 2024, consolidated balance sheet? b. Determine the amount of foreign exchange gain or loss that should be reflected in McCarthy's 2024 consolidated net income. a. Note Payable b. Foreign Exchange
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McCarthy, Inc.’s Brazilian subsidiary borrowed 100,000 euros on January 1, 2017. Exchange rates between the Brazilian real (BRL) and euro (€) and between the U.S. dollar ($) and BRL are as follows: BRL (per euro€) US $ Per BRL January 1, 2017 BRL 4.2 $0.28 Average, 2017 BRL 4.3 $0.25 December 31, 2017 BRL 4.6 $0.20 What amount of foreign exchange gain or loss should be reflected in McCarthy’s 2017 consolidated net income?a. $8,000 loss.b. $10,000 loss.c. $2,000 gain.d. $5,000 gain.
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