1) The selling price of imported olive oil is $20 per case

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1) The selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25, so it takes 1.25 Euros to buy $1. Your argest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction?

$120,000

$100,000

$90,000

$80,000

$60,000

2. The Simpson Corporation is calculating their adjusted balance sheet into U.S. Dollars. The exchange rate at the beginning of the year was $1 Euro $1 U.S. dollar The current exchange rate is.80 Euros to $1.00. Net Income for the year was zero. How much is the accounting gain/loss due to the exchange rate change?

Beginning Balance Sheet:

Assets-3,000 Euros

Equity 1,500 Euros .

Liabilities 1,500 Euros

$125, gain

$375, loss

$375,gain

$500, loss

$500, gain