On December 5, 2010, Unca Corporation, a U.S. firm, bought inventory items from

Skagerrak Corporation of Norway for 1,000,000 Norwegian kroner when the spot rate

for kroner was $0.166. The purchase was denominated in kroner. At Unca's fiscal year

end, December 31, 2010, the spot rate was $0.171. On January 4, 2011, Unca purchased

1,000,000 kroner for $167,500 and paid the invoice. How much gain or (loss) did Unca

report in its 2010 and 2011 income statements, respectively?

A) $(5,000) and $1,500

B) $0 and ($1,500)

C) ($5,000) and $3,500

D) $0 and ($3,500