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Question: Matthias Corp. had the following foreign currency


Matthias Corp. had the following foreign currency transactions during 2020:
∙ Purchased merchandise from a foreign supplier on January 20 for the U.S. dollar equivalent of
$60,000 and paid the invoice on April 20 at the U.S. dollar equivalent of $50,000.
∙ On September 1, borrowed the U.S. dollar equivalent of $300,000 evidenced by a note that is payable in the lender’s local currency in one year. On December 31, the U.S. dollar equivalent of the principal amount was $320,000.
In Matthias’s 2020 income statement, what amount should be included as a net foreign exchange gain or loss?
a. $10,000 gain
b. $10,000 loss
c. $20,000 gain
d. $30,000 loss

2.99

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