Larson, Inc

Multiple Choice

Larson, Inc. sold merchandise for 600,000 FC to a foreign vendor on November 30, 20X5. Payment in foreign currency is due January 31, 20X6. On the same day, Larson signed an agreement with a foreign exchange broker to sell 600,000 FC on January 31, 20X6. The discount rate is 8% and exchange rates to purchase 1 FC are as follows: What is the net amount of the gains or losses recognized in the financial statements for the year ended December 31, 20x5?

A) $5,840 gain
B) $6,000 loss
C) $18,000 loss
D) $12,000 gain