On September 22, Year 2, Yumi Corp. purchased merchandise from an unaffiliated foreign company for 10,000 units of the foreign company’s local currency. On that date, the spot rate was $.55. Yumi paid the bill in full on March 20, Year 3, when the spot rate was $.65. The spot rate was $.70 on December 31, Year 2. What amount should Yumi report as a foreign currency transaction loss in its income statement for the year ended December 31, Year 2?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On September 22, Year 2, Yumi Corp. purchased merchandise from an unaffiliated foreign company for 10,000 units of the foreign company’s local currency. On that date, the spot rate was $.55. Yumi paid the bill in full on March 20, Year 3, when the spot rate was $.65. The spot rate was $.70 on December 31, Year 2. What amount should Yumi report as a foreign currency transaction loss in its income statement for the year ended December 31, Year 2?

 

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