Use the following information to answer the question(s)below.
On October 4,2010,Sooty Corporation borrowed 250,000 British pounds from a London bank,evidenced by an interest-bearing note payable due in one year.The note was payable in pounds.Exchange rates for pounds were:

-What exchange gain or loss appeared on Sooty's 2010 income statement?
A)a loss of $10,000
B)a loss of $15,000
C)a gain of $10,000
D)a gain of $15,000

Question

Use the following information to answer the question(s)below.
On October 4,2010,Sooty Corporation borrowed 250,000 British pounds from a London bank,evidenced by an interest-bearing note payable due in one year.The note was payable in pounds.Exchange rates for pounds were:
 
-What exchange gain or loss appeared on Sooty's 2010 income statement?
A)a loss of $10,000 
B)a loss of $15,000 
C)a gain of $10,000 
D)a gain of $15,000

Quizplus · Accepted Answer

C)250,000 pounds × ($1.59 - $1.55)= $10,000 gain

Use the Following Information to Answer the Question(s)below