Question

Question Assume the exchange rate for the Mexican Peso is falling relative to the U.S. dollar. An American 17 company will incur losses from this falling exchange rate if the company is making: Not yet answered Select one: Marked out of 1。a. Credit purchases from Mexican companies at prices stated in Mexican Pesos. Flag question b. Credit purchases from Mexican companies at prices stated in U.S, dollars. c.Credit sales to Mexican companies at prices stated in U.S. dollars. O d. Credit sales to Mexican companies at prices stated in Mexican Pesos.

Answer 1

Answers :

Question: 17) D) Credit Sales to Mexican Companies at prices stated in Mexican Pesos

For US Company Any Transaction Stated in Home Currency (US Dollar) will not result in loss Due to the Exchange rate Fluctuation. But Stated in other Currency ( Peso in question) will result in a gain if purchases made and loss with sales stated in other currency. US Firm will incur a loss when converting the Peso into Dollars.

Question: 18 C) Be Material in amount, Unusual in nature, and not Expected to recur

Extraordinary Gain or loss will Get out of the nonregular course business Activities. Unusual and unexpected in Nature

Question: 19 D) $ 3.93

Earnings Per Share = Net Income / Weighted Average share

Weighted Average Shares

125,000 Share for 12 Months =125000*12 = 1,500,000

35,000 shares for 9 Months = 35,000 *9 = 315,000

weighted average Number of shares = ( 1500,000+315,000)/12 = 151,250 Shares

Earnings Per Share : 594,750 / 151,250 = $3.93223 (or) $3.93 (Answer)

Question :20 D) $ 450,000 net cash Provided by Financing Activities

Issues of share Capital & Dividend Paid Both Activities are financial Activities under Cash Flow Preparation :

Issue of $ 700,000 Capital is the Inflows , Dividend Paid of $250,000 is the Outflows

Net Flows From the Financial Activity Is( $700,000 -$250,000) $ 450,000