Grete Corp. had the following foreign currency transactions during 2009: LO9 Purchased merchandise from a foreign
Question:
Grete Corp. had the following foreign currency transactions during 2009: LO9
• Purchased merchandise from a foreign supplier on January 20, 2009, for the U.S. dollar equiva¬ lent of $60,000 and paid the invoice on April 20, 2009, at the U.S. dollar equivalent of $68,000.
• On September 1,2009, borrowed the U.S. dollar equivalent of $300,000 evidenced by a note that is payable in the lender’s local currency on September 1, 2010. On December 31, 2009, the U.S. dollar equivalent of the principal amount was $320,000.
In Grete’s 2009 income statement, what amount should be included as a foreign exchange loss?
a. $4,000.
b. $20,000.
c. $22,000.
d. $28,000.
Step by Step Answer:
Advanced Accounting
ISBN: 9780073379456
9th Edition
Authors: Joe Ben Hoyle, Timothy S. Doupnik, Thomas F. Schaefer, Oe Ben Hoyle