Winston Corp., a U.S. company, had the following foreign currency transactions during 2021: (1) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the U.S. dollar equivalent of $54,000. (2.) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022. What amount should be included as a foreign exchange gain or loss from the two transactions for 2022? Multiple Choice $4.000 gain. $4,000 loss. $2,000 loss. $1,000 loss

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Winston Corp., a U.S. company, had the following foreign currency transactions during 2021:
(1) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the
U.S. dollar equivalent of $54,000.
(2) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15,
2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022.
What amount should be included as a foreign exchange gain or loss from the two transactions for 2022?
Multiple Choice
$4,000 gain.
$4,000 loss.
$2,000 loss.
$1,000 loss.
Transcribed Image Text:Winston Corp., a U.S. company, had the following foreign currency transactions during 2021: (1) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the U.S. dollar equivalent of $54,000. (2) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022. What amount should be included as a foreign exchange gain or loss from the two transactions for 2022? Multiple Choice $4,000 gain. $4,000 loss. $2,000 loss. $1,000 loss.
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