On March 1, Laton Products (a U.S. firm) purchased manu-facturing inputs from a Mexican supplier for 20,000 pesos, payable on June 1. The exchange rate for pesos on March 1was $0.17. If the exchange rate increases to $0.19 on June 1,what amount of gain or loss would be reported by Latonrelated to the currency exchange?a. $400 gain.b. $200 loss.c. $400 loss.d. $200 gain.

Question

On March 1, Laton Products (a U.S. firm) purchased manu-
facturing inputs from a Mexican supplier for 20,000 pesos,

payable on June 1. The exchange rate for pesos on March 1
was $0.17. If the exchange rate increases to $0.19 on June 1,
what amount of gain or loss would be reported by Laton
related to the currency exchange?
a. $400 gain.
b. $200 loss.
c. $400 loss.
d. $200 gain.

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