On September 1st of the current year, Mooney Company writes a contract agreeing to sell to Berry Company 200,000 foreign currency (FC) units at a specific price of $2.14 per FC with delivery in 30 days.The spot rate at the end of 30 days is $2.17.The appropriate discount rate for both Mooney Company and Berry Company is 9%, and Mooney's year end is December 31.
On the settlement of the contract, Mooney would record a
A)gain of $6,000.
B)gain of $5,955.
C)loss of $6,000.
D)loss of $5,955.

Question

On September 1st of the current year, Mooney Company writes a contract agreeing to sell to Berry Company 200,000 foreign currency (FC) units at a specific price of $2.14 per FC with delivery in 30 days.The spot rate at the end of 30 days is $2.17.The appropriate discount rate for both Mooney Company and Berry Company is 9%, and Mooney's year end is December 31. ​
On the settlement of the contract, Mooney would record a
A)​gain of $6,000.
B)​gain of $5,955.
C)​loss of $6,000.
D)​loss of $5,955.

Quizplus · Accepted Answer

The Answer of On September 1st of the current year, Mooney Company writes a contract agreeing to sell to Berry Company 200,000 foreign currency (FC) units at a specific price of $2.14 per FC with delivery in 30 days.The spot rate at the end of 30 days is $2.17.The appropriate discount rate for both Mooney Company and Berry Company is 9%, and Mooney's year end is December 31. ​
On the settlement of the contract, Mooney would record a
A)​gain of $6,000.
B)​gain of $5,955.
C)​loss of $6,000.
D)​loss of $5,955.

On September 1st of the Current Year, Mooney Company Writes