Question 6

Nagal Inc., a Philippine company, had the following foreign currency transactions during 2030: Inventory was purchased from a foreign supplier on January 20, 2030, for the Philippine peso equivalent of P90,000. The invoice was paid on March 20, 2030, at the Peso equivalent of P96,000. On July 1, 2030, Nagal borrowed the peso equivalent of P500,000 evidenced by a note that was payable in the lender's local currency on July 1, 2032. On December 31, 2030, The Philippine 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 Nagal's 2030 income statement, what amount should be included as foreign exchange transaction loss as part of net income?

Select one:

P21,000

P27,000

P6,000

P-0-

Question 7

On November 1, 2019, VDB Company a Philippine Based Company received an order of 1,500 units of inventory from a HK Company a U.S. based Company for $50,000. The inventory was shipped by VDB Company and billed HK firm on December 1, 2019. VDB Company received the customer remittance in full on March 2, 2020. VDB's fiscal year end is December 31. Assume that VDB did not engage in any form of hedging activity. The following are the spot rates for U.S. Dollars at various times are as follow: How much is the outstanding accounts receivable as of December 31, 2019?

Select one:

2,060,000

2,075,000

2,042,500

2,030,000

Question 9

On September 1, 2030, Tristan Inc., a Philippine Corporation sold inventory to a foreign entity for $2,500. Terms of the sale require payment in U.S dollars on February 1, 2031. On September 1, 2030, the spot exchange rate was P50 per dollar. At December 31, 2030, Tristan's year-end, the spot rate was P49, but the rate increase to P52 by February 1, 2031, when payment was received. How much should Tristan report as foreign exchange transaction gain or loss as part of 2031 income?

Select one:

P7,500 loss

P5,000 loss

P7,500 gain

P5,000 gain

Question 10

Greyhoundz Co., a Philippine corporation, sold inventory on credit to a British company on May 1, 2030. Greyhoundz received payment of 262,500 British pounds on Oct 1, 2030. The exchange rate was P1 = 0.65 on May 1 and P1 0.70 on Oct 1. What amount should be recorded as sale of inventory in the income statement of Greyhoundz in 2030? (Round to the nearest peso).

Select one:

P183,750

P403,846

P170,625

P262,500