On September 1, 2017, Mudd Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days. The relevant exchange rates are as follows: The first forward contract was to hedge a purchase of inventory on September 1, payable on December 1. On September 30, what amount of foreign currency transaction loss should Mudd Plating report in income?
A) $0.
B) $2,500.
C) $5,000.
D) $10,000.

Question

On September 1, 2017, Mudd Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days. The relevant exchange rates are as follows:  The first forward contract was to hedge a purchase of inventory on September 1, payable on December 1. On September 30, what amount of foreign currency transaction loss should Mudd Plating report in income?
A) $0. 
B) $2,500. 
C) $5,000. 
D) $10,000.

Quizplus · Accepted Answer

The Answer of On September 1, 2017, Mudd Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days. The relevant exchange rates are as follows:  The first forward contract was to hedge a purchase of inventory on September 1, payable on December 1. On September 30, what amount of foreign currency transaction loss should Mudd Plating report in income?
A) $0. 
B) $2,500. 
C) $5,000. 
D) $10,000.

On September 1, 2017, Mudd Plating Company Entered into Two