CHAPTER 7: EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES 3. The A Company has the pesos as its functional currency. On October 16, 2021, A ordered some inventory from a foreign supplier and agreed a purchase price of US$160,000. The inventory was received on November 15, 2021. At December 31, 2021 the inventory remained on hand and the trade payable balance for the inventory purchase remained outstanding. The supplier was paid on January 27, 2022 and the inventory was sold on January 31, 2022. The following information about exchange rates is available: October 16, 2021 P1 : US$2.60 November 15, 2021 P1 : US$2.50 December 31, 2021 P1 : US$2.40 January 27, 2022 P1 : US$2.25 At what amount should the trade payable balance due to supplier be presented in the Statement of Financial Position of A at December 31, 2021? a. P71,111 b. P64,000 C. P66,667 d. P61,538 4. Victory Corporation issued a promissory note denominated in foreign currency for the purchase made from a supplier in England on December 1, for a 60-day, 18% promissory note for 108,000 pounds, at a selling rate of IFC to P74.20. On December 31, the selling spot rate is 1FC to P74.85. On January 30, the selling spot rate is 1FC to P75.75. On the settlement date, how much is the foreign exchange gain/loss? a. P172,422 loss b. P172,422 gain c. P100, 116 loss d. P98,658 loss 5. On April 1, 2021, Walter Company sold merchandise worth a total of 100,000 foreign currency to its foreign customer, receivable within 30 days. On April 30, 2021, Walter received payment from the customer. The following information of spot rates is provided: Buying Selling April 1, 2021 44.03 44.15 April 30, 2021 44.10 44.20