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: How much Foreign Exchange Gain or Loss should Brisco record on May 31?
A) $2,520,000 gain.
B) $20,000 gain.
C) $20,000 loss.
D) $80,000 gain.
E) $80,000 loss.

Question

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:  How much Foreign Exchange Gain or Loss should Brisco record on May 31?
A) $2,520,000 gain. 
B) $20,000 gain. 
C) $20,000 loss. 
D) $80,000 gain. 
E) $80,000 loss.

Quizplus · Accepted Answer

The Answer is C

Brisco Bricks Purchases Raw Material from Its Foreign Supplier, Bolivian