Question

On November 6, 20X7, Zucor Corp. purchased merchandise from an unaffiliated foreign company for 50,000 units of the foreign company's local currency. On that date, the spot rate was $1.259. Zucor paid the bill in full three months later when the spot rate was $1.258. The spot rate was $1.255 on December 31, 20X7. What amount should Zucor report as a foreign currency transaction gain in its income statement for the year ended December 31, 20X7?

a. $0
b. $50
c. $
d. $200

Answer 1

The answer and procedures of the exercise are attached in the following archives.

Explanation

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.