Question :
51.Refer to the above data. The number of dollars equivalent : 1237537
51.Refer to the above data. The number of dollars equivalent to ¥5,250,000 on this date is:
A. $40,110.00.
B. $687,172.50.
C. $87,225.50.
D. Depends upon whether the item is a receivable or a payable.
¥5,250,000/¥130.89005 = $40,110 or ¥5,250,000 × $0.00764 = $40,110
52.Walblue imports a desk from a French manufacturer for sale in its chain of U.S. stores. The cost of a desk to Walblue is 3,700 euros (€). What is the dollar cost of one of these desks if the exchange rate is currently 1.117 euros per U.S. dollar? (round to nearest cent)
A. $1,117.00.
B. $4,132.90.
C. $3,312.44.
D. $3,700.00.
€3,700/1.117 = $3,312.44
53.At the current exchange rate of $1.40 per British pound, a one-day pass to Worldwide Theme Park of Florida sells for 45 pounds at travel agencies throughout Great Britain. If the exchange rate increases to $1.70 per pound, what will happen to the price of a one-day pass sold in Great Britain?
A. The price will be unchanged.
B. The price will fall to 37 pounds.
C. The price will increase to 54 pounds.
D. The price will fall by 12 pounds.
45 pounds × $1.40 = $63$63/$1.70 = 37 pounds
54.Rochester, Inc. purchased cameras from a Japanese company at a price of 4 million yen. On the purchase date, the exchange rate was $0.0100 per Japanese yen, but when Rochester, Inc., paid the liability, the exchange rate was $0.0103 per yen. When this foreign account payable was paid, Rochester, Inc., recorded a:
A. Debit to Inventory of $1,200.
B. Loss of $1,200.
C. Credit to Accounts Payable of $41,200.
D. Gain of $1,200.
(¥4,000,000 × $0.0100) – (¥4,000,000 × $0.0103) = -$1,200 loss
55.Hayden, Inc. purchased knobs from a Greek company for 185,000 Euros. On the purchase date the exchange rate was $0.80 per Euro, but when Hayden paid the liability, the exchange rate was $0.70 per Euro. When this foreign account payable was paid, Hayden, Inc., recorded a:
A. Debit to Inventory of $18,500.
B. Loss of $18,500.
C. Credit to Accounts Payable of $148,000.
D. Gain of $18,500.
(€185,000 × $0.80) – (€185,000 × $0.70) = $18,500 gain
56.Tuliptime, Inc. sold American fashions to a Japanese company at a price of 4 million yen. On the sale date, the exchange rate was $0.0100 per Japanese yen, but when Tuliptime received payment from its customer, the exchange rate was $0.0103 per yen. When the foreign receivable was collected, Tuliptime:
A. Credited Sales for $1,200.
B. Debited Cash for $40,000.
C. Credited Gain on Fluctuation of Foreign Currency for $1,200.
D. Debited Loss on Fluctuation of Foreign Currency for $1,200.
(¥4,000,000 × $0.0103) – (¥4,000,000 × $0.0100) = $1,200 gain
57.Barter Corp. sold American telecommunications equipment to a British company for 650,000 pounds. On the sale date, the exchange rate was $1.65 per British pound, but when Barter received payment from its customer, the exchange rate was $1.60 per pound. When the foreign receivable was collected, Barter Enterprises:
A. Credited Sales for $32,500.
B. Debited Cash for $1,040,000.
C. Credited Gain on Fluctuation of Foreign Currency for $32,500.
D. Debited Loss on Fluctuation of Foreign Currency for $32,500.
(?650,000 × $1.60) – (?650,000 × $1.65) = $32,500 loss
58.Flynn Corporation purchased bicycles from a British manufacturer at a price of 45,000 British pounds on November 15, 2014 with payment due in 60 days. Using the following exchange rates, what gain or loss from currency fluctuations should be recognized in 2014 and 2015, respectively?
A. A $2,250 loss in 2014 and a $900 gain in 2015.
B. No gain or loss in 2014 and a $1,350 loss in 2015.
C. A $2,250 gain in 2014 and a $900 loss in 2015.
D. No gain or loss in 2014 and a $1,350 gain in 2015.
(?45,000 × $1.75) – (?45,000 × $1.70) = $2,250 loss in 2014(?45,000 × $1.75) – (?45,000 × $1.73) = $900 gain in 2015
59.Exact Instruments sold equipment to a British research group at a price of 70,000 British pounds on December 1, 2014 with payment due in 90 days. Using the following exchange rates, what gain or loss from currency fluctuations should be recognized in 2014 and 2015, respectively?
A. A $2,800 loss in 2014 and a $3,500 gain in 2015.
B. No gain or loss in 2014 and a $700 loss in 2015.
C. A $2,800 gain in 2014 and a $3,500 loss in 2015.
D. No gain or loss in 2014 and a $700 gain in 2015.
(?70,000 × $1.78) – (?70,000 × $1.82) = $2,800 gain in 2014(?70,000 × $1.77) – (?70,000 × $1.82) = $3,500 loss in 2015
60.Gains and losses from fluctuations in exchange rates should be shown on the:
A. Balance sheet.
B. Income statement.
C. Statement of changes to owners’ equity.
D. Statement of cash flows.
