Our company uses the $US as its functional currency and purchased merchandise from a vendor in England on November 20 for 260,000 British pounds. Payment was due in British pounds on January 20. The spot rates to purchase one pound were as follows: November 20 $1.27 December 31 1.30 January 20 1.32 How should the foreign currency transaction gain or loss be reported on our company's financial statements at December 31? A gain of $7,800 in the income statementx A loss of $7,800 in the income statement A gain of $13,000 in the income statement A loss of $13,000 in the income statement On October 1 of the current year, a U.S. company sold merchandise on account to a British company for 3,000 pounds (exchange rate, 1 pound = $1.41). At the company's December 31 fiscal year end, the exchange rate was 1 pound = $1.38. The exchange rate was 1 pound = $1.36 on collection in January of the subsequent year. The functional currency for the U.S. company is the $US. What amount would the company recognize as a gain(loss) from foreign currency translation when the receivable is collected? $(60) $60 $(150) $150X On November 2, 2018, a U.S.-based company with the $US as its functional currency entered into a 90-day futures contract to purchase 60,000 Swiss francs when the contract quote was $1.06. The purchase was for speculation in price movement. The following exchange rates existed during the contract period: 30 Day Futures Spot Rate November 2, 2018 $1.00 $1.01 December 31, 2018 $1.02 $1.04 January 31, 2019 $1.03 $1.05 What amount should the U.S.-based company report as foreign currency exchange loss in its income statement for the year ended December 31, 2018? $3,600 $3,000x $2,400 $1,200 On September 3, 2018, a U.S.-based company with the $US as its functional currency purchased merchandise for 16,000 units of the foreign company's local currency. On that date, the spot rate was $1.44. The U.S.-based company paid the bill in full on February 15, 2019, when the spot rate was $1.41. The spot rate was $1.40 on December 31, 2018. What amount should the U.S.-based company report as a foreign currency transaction gain (loss) in its income statement for the year ended December 31, 2018? $640 $480X $(640) $(480) On November 3, the spot price for cotton was $0.76/lb., and futures price for February delivery was $0.80/1b. On November 3, Levi Strauss bought 150 futures contracts on the commodity exchange at $0.80/lb. for acceptance in February. Each contract was for 25,000 lb. Levi Strauss designated these contracts as a fair value hedge of 3,750,000 lb. of current inventory which it expected to sell in February. The average spot of this inventory when purchased was $0.68/|b. Levi Strauss properly documented the hedge and employed fair value hedge accounting. On November 30, the company's fiscal year end, the February commodity exchange futures price was $0.85/lb. In the November 30 balance sheet, Levi Strauss should record the futures contracts as a Select one: a. $ 187,500 asset b. $187,500 liability * c. $3,187,500 asset d. $3,187,500 liability On November 3, the spot price for cotton was $0.76/lb., and futures price for February delivery was $0.80/1b. On November 3, Levi Strauss bought 150 futures contracts on the commodity exchange at $0.80/lb. for acceptance in February. Each contract was for 25,000 lb. Levi Strauss designated these contracts as a fair value hedge of 3,750,000 lb. of current inventory which it expected to sell in February. The average spot of this inventory when purchased was $0.68/lb. Levi Strauss properly documented the hedge and employed fair value hedge accounting. On November 30, the company's fiscal year end, the February commodity exchange futures price was $0.85/lb. If, on November 30, Levi Strauss concluded that the hedge was 100% effective, it should record the hedged cotton inventory in the November 30 balance sheet at Select one: a. $4,350,000 b. $4,250,000 c. $3,000,000 x d. $2,362,500