Flapp Corporation, a U

question 97

Multiple Choice

Flapp Corporation, a U.S. corporation, conducts all of its transactions in the U.S. dollar. It sells inventory for $1 million to a Canadian company when the exchange rate is $1US: $1.2Can. The Canadian company pays for the inventory when the exchange rate is $1US: $1.25Can. What is Flapp's exchange gain or loss on this sale?

• A) Flapp does not have a foreign currency exchange gain or loss, since it conducts all of its transactions in the U.S. dollar.
• B) Flapp's account receivable for the sale is $1 million (when the exchange rate is $1US: $1.2Can.) and it collects on the receivable when the exchange rate is $1US: $1.25Can. Flapp has an exchange gain of $50,000.
• C) Flapp's account receivable for the sale is $1 million (when the exchange rate is $1US: $1.2Can.). It collects on the receivable at $1US: $1.25Can. Flapp has an exchange loss of $5,000.
• D) Flapp's foreign currency exchange loss is $50,000.

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Definitions:

Japanese

Relating to Japan, its people, culture, or language.

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The process of creating a connection and understanding between individuals or groups, often based on trust and mutual respect.

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A formal conversation between a job applicant and an employer aimed at evaluating the applicant's suitability for a position.

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The conduct, behavior, and attitude deemed appropriate within a specific profession, reflecting competence, ethical practices, and dedication.