International exam 3 Question and
answers correctly solved 2026/2027
1. Pigskin Co., a U.S. corporation, sold inventory on credit to a British company on April 8, 2018. Pigskin
received payment of 35,000 British pounds on May 8, 2018. The exchange rate was £1 = $1.54 on April 8
and £1 = 1.43 on May 8. What amount of foreign exchange gain or loss should be recognized? (round to
the nearest dollar)
a. $10,500 loss
b. $10,500 gain
c. $ 1,750 loss
d. $ 3,850 loss
e. No gain or loss should be recognized. - correct answer Answer: D
Feedback:
$1.43 - $1.54 = ($.11)
($.11) × £35,000 = ($3,850) Loss
Norton Co., a U.S. corporation, sold inventory on December 1, 2018, with payment of 10,000 British
pounds to be received in sixty days. The pertinent exchange rates were as follows:
Dec 1 Spot rate: $1.7241
Dec 31 Spot rate: $1.8182
Jan 30 Spot rate: $1.6666
2. For what amount should Sales be credited on December 1?
a. $ 5,500.
b. $16,949.
c. $18,182.
,d. $17,241.
e. $16,667. - correct answer Answer: D
Learning Objective: 09-02
Feedback:
December 1st Spot Rate $1.7241 × £10,000 = $17,241 Sales Revenue
Norton Co., a U.S. corporation, sold inventory on December 1, 2018, with payment of 10,000 British
pounds to be received in sixty days. The pertinent exchange rates were as follows:
Dec 1 Spot rate: $1.7241
Dec 31 Spot rate: $1.8182
Jan 30 Spot rate: $1.6666
3. What amount of foreign exchange gain or loss should be recorded on December 31?
a. $300 gain.
b. $300 loss.
c. $ 0.
d. $941 loss.
e. $941 gain. - correct answer Answer: E
Feedback: $1.8182 - $1.7241 = $.0941 × £10,000 Gain
Norton Co., a U.S. corporation, sold inventory on December 1, 2018, with payment of 10,000 British
pounds to be received in sixty days. The pertinent exchange rates were as follows:
Dec 1 Spot rate: $1.7241
, Dec 31 Spot rate: $1.8182
Jan 30 Spot rate: $1.6666
4. What amount of foreign exchange gain or loss should be recorded on January 30?
a. $1,516 gain.
b. $1,516 loss.
c. $575 loss.
d. $500 loss.
e. $500 gain. - correct answer Answer: B
Feedback: $1.6666 - $1.8182 = ($.1516) × £10,000 = ($1,516) Loss
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:
5. For what amount should Brisco's Accounts Payable be credited on May 8?
a. $2,500,000.
b. $2,440,000.
c. $1,600,000.
d. $1,639,344.
e. $1,666,667. - correct answer Answer: A
Feedback: $1.25 × FC 2,000,000 = $2,500,000 A/P
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:
answers correctly solved 2026/2027
1. Pigskin Co., a U.S. corporation, sold inventory on credit to a British company on April 8, 2018. Pigskin
received payment of 35,000 British pounds on May 8, 2018. The exchange rate was £1 = $1.54 on April 8
and £1 = 1.43 on May 8. What amount of foreign exchange gain or loss should be recognized? (round to
the nearest dollar)
a. $10,500 loss
b. $10,500 gain
c. $ 1,750 loss
d. $ 3,850 loss
e. No gain or loss should be recognized. - correct answer Answer: D
Feedback:
$1.43 - $1.54 = ($.11)
($.11) × £35,000 = ($3,850) Loss
Norton Co., a U.S. corporation, sold inventory on December 1, 2018, with payment of 10,000 British
pounds to be received in sixty days. The pertinent exchange rates were as follows:
Dec 1 Spot rate: $1.7241
Dec 31 Spot rate: $1.8182
Jan 30 Spot rate: $1.6666
2. For what amount should Sales be credited on December 1?
a. $ 5,500.
b. $16,949.
c. $18,182.
,d. $17,241.
e. $16,667. - correct answer Answer: D
Learning Objective: 09-02
Feedback:
December 1st Spot Rate $1.7241 × £10,000 = $17,241 Sales Revenue
Norton Co., a U.S. corporation, sold inventory on December 1, 2018, with payment of 10,000 British
pounds to be received in sixty days. The pertinent exchange rates were as follows:
Dec 1 Spot rate: $1.7241
Dec 31 Spot rate: $1.8182
Jan 30 Spot rate: $1.6666
3. What amount of foreign exchange gain or loss should be recorded on December 31?
a. $300 gain.
b. $300 loss.
c. $ 0.
d. $941 loss.
e. $941 gain. - correct answer Answer: E
Feedback: $1.8182 - $1.7241 = $.0941 × £10,000 Gain
Norton Co., a U.S. corporation, sold inventory on December 1, 2018, with payment of 10,000 British
pounds to be received in sixty days. The pertinent exchange rates were as follows:
Dec 1 Spot rate: $1.7241
, Dec 31 Spot rate: $1.8182
Jan 30 Spot rate: $1.6666
4. What amount of foreign exchange gain or loss should be recorded on January 30?
a. $1,516 gain.
b. $1,516 loss.
c. $575 loss.
d. $500 loss.
e. $500 gain. - correct answer Answer: B
Feedback: $1.6666 - $1.8182 = ($.1516) × £10,000 = ($1,516) Loss
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:
5. For what amount should Brisco's Accounts Payable be credited on May 8?
a. $2,500,000.
b. $2,440,000.
c. $1,600,000.
d. $1,639,344.
e. $1,666,667. - correct answer Answer: A
Feedback: $1.25 × FC 2,000,000 = $2,500,000 A/P
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:
