On 6/1/17, an American Firm Sold Inventory Costing 100,000 Euro

Multiple Choice

On 6/1/17, an American firm sold inventory costing 100,000 Euro from a Dutch firm with payment to be received on 8/1/17.Also on 6/1/17, the American firm acquired an option for $1,500 to sell 100,000 Euro on 8/1/17.The strike price for the option was $1.21.The exchange rates were as follows: ?

$$\begin{array} { l r r } & \text { Spot } & \text { Option value } \\\hline 6 / 1 / 17 & 1 \mathrm { CD } = \$ 1.20 & \$ 1,500 \\6 / 30 / 17 & 1 \mathrm { CD } = \$ 1.19 & \$ 1,800 \\8 / 1 / 17 & 1 \mathrm { CD } = \$ 1.15 & \$ 6,000\end{array}$$ The American firm's fiscal year end is June 30, 2017.What is the net gain or loss recognized in the financial statements for the year ended June 30, 2017?

A) $700 loss
B) $1,000 loss
C) $6,000 loss
D) $4,300 loss