On July 1, 2020, CANCO Purchased Inventory from Its Main

Multiple Choice

On July 1, 2020, CANCO purchased inventory from its main U.S. supplier, RNB Enterprises, at a cost of US$12,000. CANCO's year end is on July 31. Payment of US$12,000 for the inventory is due on August 31, 2020. Some important dates regarding this transaction, as well as the exchange rates in effect at each of these dates are shown below:
$$\begin{array} { | l | l | l } \hline \text { Parsaction date: July } 1,2020 : & \text { 1 U.S. Dollar } = \text { CDN } \$ 1.370 \\\hline\text { Year end July } 31,2020 : & \text { 1 U.S. Dollar } = \text { CDN } \$ 1.345 \\\hline \text { Setternent date: August } 31,2020 : & \text { 1 U.S. Dollar } = \text { CDN } \$ 1.325 \\\hline\end{array}$$ At what amount would CANCO record its liability to RNB at the time of the inventory purchase?

A) CDN$15,900
B) CDN$16,440
C) CDN$16,140
D) US$12,000