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19. On September 1, 2018, Swash Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days. The relevant exchange rates are as follows: Forward Rate Spot rate ForDec.2011 1.47 1.48 September 1, 2018 1.46 September 30, 2018 (year-end) 1.50 The first forward contract was to hedge a purchase of inventory on September 1, payable on December 1. On September 30, what amount of foreign currency transaction loss should Swash Plating report in income? A) $10,000. B) $2,500. C) $5,000 D) sO. 20. Stuart Corporation a U.S. company, contracted to purchase foreign goods. Payment in foreign currency was due one month after delivery. Between the delivery date and the time of payment, the exchange rate changed in Stuart's favor. The resulting gain should be reported in the financial statements as a(n): A) component of other comprehensive income. B) extraordinary income. C) component of income from continuing operations. D) deferred income. 21. A transaction loss would result from: A) the import of merchandise when the transaction is denominated in a foreign B) a decrease in the exchange rate applicable to an asset denominated in a foreign C) a decrease in the exchange rate applicable to a liability denominated in a foreign D) an increase in the exchange rate applicable to an asset denominated in a foreign currency. currency. currency currency

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