A Philippine importer that purchases merchandises PDF

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A Philippine importer that purchases merchandises from (FCU) would be exposed to a net exchange gain on the unpaid balance if the:a foreign firm’s foreign current unitPeso weakened relative to the FCU and the FCU was the denominated currency. Peso weakened relative to the FCU and the peso was the de...

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A Philippine importer that purchases merchandises from a foreign firm’s foreign current unit (FCU) would be exposed to a net exchange gain on the unpaid balance if the:

Peso weakened relative to the FCU and the FCU was the denominated currency.

Peso weakened relative to the FCU and the peso was the denominated currency.orrect!

Peso strengthened relative to the FCU and the FCU was the denominated currency.

Peso strengthened relative to the FCU and the peso was the denominated currency.

Question 9

On December 1, 2019, Micro World, Inc. entered into 120-day forward contract to purchase 100,000 dollars. Micro World’s fiscal year ends on December 31. The direct exchange rates were as follows:

Assume that the forward contract was hedge the purchase of furniture for 100,000 dollars on December 1, 2019, with payment due on March 31, 2020, how much gain or loss on foreign currency transaction must appear on the income statement of 2019?

Date

Spot rate

Forward rate for March 31

December 1, 2019

P 40.00

P40.90

December 31, 2019

41.00

41.20

January 30, 2020

40.80

40.50

March 31, 2020

40.20

A. P70,000 loss

B. P70,000 gain

C. P100,000 loss

D. P0...