DD Inc., a Philippine company, bought machine parts from a foreign country on March 1, 20x4, for 30,000

foreign currency units (FCU), when the spot rate for FCU was P.4895. DD's year-end was March 31, when

the spot rate was P.4845. On April 20, 20x5, DD paid the liability with 30,000 FCUs at a rate of P.4945. DD's

income statements should report a foreign exchange gain or the years ended March 31, 20X4 and 20x5 of:

20x4 20x5 20x4 20x5

Kennetha Corporation had the following foreign currency transactions during 20x4:

Merchandise was purchased from a foreign supplier on January 20, 20x4 for the Philippine peso

equivalent of P90,000. The invoice was paid on March 20, 20x4, at the Philippine peso equivalent of

P96,000.

On July 1, 20x4, Kennetha borrowed from foreign corporation with a Philippine peso equivalent of

P500,000 evidenced by a note that was payable in the lender's local currency on July 1, 20x5. On

December 31, 20x4, the Philippines peso equivalents of the principal amount and accrued interest

were P520,000 and P26,000, respectively. Interest on the note is 10% per annum.

In Kennetha's 20x4 income statement, what amount should be included as foreign exchange loss?

On November 1, 20x3, Jon Corporation sold merchandise to Ger Corporation, a foreign firm. Jon measured

and recorded the account receivable from the sale at P78,000. Ger paid for this account on November

30, 20x3. Spot rates for foreign currency unit (FCU) on November 1 and November 30, respectively, were

P0.80 and P0.78.

If the sale of the merchandise was denominated in FCU, the November 30 entry to record the receipt of

payment from Ger included a:

a. credit to Accounts Receivable for P76,050 c. debit to Cash for P78,000

b. credit to Exchange Gain for P1,950 d. debit to Exchange Loss for P1,950