The Effects of Changes in Foreign Exchange Rates

**Section A** EuroTrade, whose functional currency is the Euro (€), purchased inventory from a US supplier on 15 November 20X5 for $100,000 USD when the exchange rate was €1 = $1.10. The invoice remains unpaid at 31 December 20X5, when the exchange rate is €1 = $1.15. The inventory is still in stock and its net realizable value exceeds its cost. What is the total impact on EuroTrade's profit or loss for the year ended 31 December 20X5 regarding this transaction?

**Section B - Case 3: PayStream (Question 5 of 5)** *Scenario:* PayStream, a FinTech firm whose functional currency is the Dinar (D), issued 10,000 convertible bonds on 1 January 20X5 at their par value of D100 each. The bonds pay a 4% coupon annually in arrears and mature in 3 years. Similar bonds without a conversion option carry an interest rate of 7%. (PV of $1 at 7% for 3 yrs = 0.8163; PV of $1 annuity at 7% for 3 yrs = 2.6243). On 1 July 20X5, PayStream bought 50,000 shares in DataCo for D3 each, irrevocably designating them at Fair Value Through OCI (FVTOCI). At 31 December 20X5, the shares traded at D3.50. On 1 November 20X5, PayStream bought servers from a US supplier for $100,000 USD. Exchange rates: 1 Nov: $1 = D0.80; 31 Dec: $1 = D0.85. The invoice is unpaid at year-end. *Question:* What is the foreign exchange gain or loss to be recognized in profit or loss regarding the US supplier payable for the year ended 31 December 20X5?