Multiple Choice.Choose the best answer.Support it with Computation. 10 points each.

1.If P56.50 can be exchanged for 1 US dollar, the direct and indirect exchange rate quotations are:

DirectIndirectDirectIndirect

a.P5.50$1c.P1.00$.018

b.P1.00$56.50d.P1.00$.018

2.If one (1) Euro can be exchanged for P69.25 Philippine peso, the indirect exchange rate of Euro per Philippine peso is:

a..P0.014b.P6.925 Euroc.6.825 Eurod.6.725 Euro

3.Jack Corporation imported a machine for US$50,000 from the United States on January 10,2020. A corresponding letter of credit (LC) was opened with metro Bank to cover the importation.Shipment was effected on March 24, 2020 at which time the exporter collected the proceeds of the LC when the exchange rate was P56.00 to US$1.On April 1, 2020 Jack paid the LCwhen the exchange rate was P56.45.

What is the forex gain or loss to be recognized by Jack from the fluctuation on the exchange rate?

a..P0b.P22,500 gainc.P22,500 lossd.$25,000 loss

4.Robinsons, a Philippine company bought inventory from a supplier in Singapore on November 5, 2019 for50,000 Sing dollar, when the spot rate was P33.60.On December 31, 2012, the spot rate was P33.10.On January 15, 2020 Robinsons bought 50,000 Sing dollar at a spot rate of P33.20 and paid the invoice.

How much should Robinsons report in its statements of comprehensive income for 2019 and 2020 as forex gain of (loss)?

2019202020192020

a..P25,000(P5,000)c.P 0(P25,000)

b.(P25,000)P0d.P0P0

5.On September 1, 2019 Batt Corporation received an order for merchandise from a foreign customer for 10,000 local currency units (LCU) when the Philippine peso equivalent was P96,000.Batt shipped the merchandise on October 15, 2019 and billed the customer for 10,000 LCU when the Philippine peso equivalent was P100,000.Batt received the customer's remittance in full on November 16, 2019 and sold the 10,000 LCU for P105,000.

In its statement of comprehensive income for the year ended December 31, 2019, Batt should report a forex gain of:

a..P0b.P4,000c.P5,000d.P9,000