Assume that Signh agrees to purchase US$100,000 for C$84,745 on January 15,2018.The exchange rate at year-end is US$1 = C$1.20 and the January 15,2018 exchange rate is US$1 = C$1.19.What journal entry is required at January 15,2013?
A) $701 loss.
B) $701 gain.
C) $711 loss.
D) $711 gain.

Question

Quizplus · Accepted Answer

B)
At Jan 15, 2013: 100 / 1.19 = 84,034
At year-end: 100 / 1.20 = 83,333
Change is 84,034 - 83,333 = 701 gain

Assume That Signh Agrees to Purchase US$100,000 for C$84,745 on January