4- On September 1, 2016, Bain Corp. recorded a sale of inventory to a foreign customer for 300,000 LCUs when the US dollar equivalent was $96,000. Bain did not enter into a forward contract. Bain shipped the inventory on October 15, 2016 when the US dollar equivalent was $100,000. Bain received the customers remittance in full on November 16, 2016, and sold the 300,000 LCU for $105,000. In its income statement for the year ended December 31, 2016, Bain should report as part of net income a foreign exchange transaction gain of:

Select one:

a.$0

b.$4,000

c.$5,000

d.$9,000

5- Which of the following foreign subsidiary accounts will be converted into the same number of U.S. dollars, regardless of whether translation or remeasurement is used?

Select one:

a.Inventories

b.Equipment

c.Prepaid insurance

d.Accounts payable

6-On December 5, 2016, Goose Corporation, a US firm, bought inventory items from Grebes Corporation of Norway for 1,000,000 Norwegian krone when the spot rate for krone was $0.168. At Gooses December 31, year-end, the spot rate was $0.167. On January 4, 2017, Goose purchased 1,000,000 krone for $167,500 and paid the invoice. How much gain or (loss) should Goose report in its 2016 and 2017, respectively, income statements?

Select one:

a.$(1,000) and $500

b.$0 and ($500)

c.$0 and $500

d.$1,000 and ($500)