Exercise Answers - Spot Rates
Exercise Answers - Spot Rates
Payment
of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is ATC's fiscal
year-end. The pertinent exchange rates were as follows:
Indirect Exchange
rates
May 8 0.8000
May 31 0.7937
June 7 0.8333
How much will it cost, in terms of the Functional Currency, ATC to finally pay the
payable on June 7?
2,400,000.
Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May
8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is
Brisco's fiscal year-end. The pertinent exchange rates were as follows:
Selling Spot Buying Spot
Rate Rate
May 8 P 1.25 P 1.23
May 31 P 1.26 P 1.25
June 7 P 1.20 P 1.21
How much Foreign Exchange Gain or Loss should Brisco record on May 31?
20,000 loss.