1.

Delta Corporation (a U.S. company) has several transactions with foreign entities. On December 2, 20X1, Delta bought items from foreign company at a price of 300,000 yen when the direct exchange rate was 1 yen = $1.17. Delta made payment to the foreign company on December 20, 20X1, when the exchange rate had changed to 1 yen = $1.21. The foreign exchange gain or loss reported by Delta from this transaction will be:

		No gain or loss is reported
		$12,000 loss
		$12,000 gain

2.

A U.S. company sells merchandise on credit (denominated in Euros) to a European company. For the U.S. company, which of the following statements is true?

		If the euro appreciates, a foreign exchange gain will occur.
		If the euro depreciates, a foreign exchange gain will occur.
		No foreign exchange gain or loss will occur.
		If the euro appreciates, a foreign exchange loss will occur