Westmore, Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling. The following exchange rates were in effect during 2011:
-Gunther Co. established a subsidiary in Mexico on January 1, 2011. The subsidiary engaged in the following transactions during 2011:
What amount of foreign exchange gain or loss would have been recognized in Gunther's consolidated income statement for 2011?
A) $800,000 gain.
B) $760,000 gain.
C) $320,000 loss.
D) $280,000 loss.
E) $440,000 loss.

Question

Westmore, Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling. The following exchange rates were in effect during 2011: 
-Gunther Co. established a subsidiary in Mexico on January 1, 2011. The subsidiary engaged in the following transactions during 2011: 
What amount of foreign exchange gain or loss would have been recognized in Gunther's consolidated income statement for 2011?
A) $800,000 gain. 
B) $760,000 gain. 
C) $320,000 loss. 
D) $280,000 loss. 
E) $440,000 loss.

Quizplus · Accepted Answer

The Answer of Westmore, Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling. The following exchange rates were in effect during 2011: 
-Gunther Co. established a subsidiary in Mexico on January 1, 2011. The subsidiary engaged in the following transactions during 2011: 
What amount of foreign exchange gain or loss would have been recognized in Gunther's consolidated income statement for 2011?
A) $800,000 gain. 
B) $760,000 gain. 
C) $320,000 loss. 
D) $280,000 loss. 
E) $440,000 loss.