Mills IncHad a Receivable from a Foreign Customer That Is Due

question 62

Multiple Choice

Mills Inc.had a receivable from a foreign customer that is due in the local currency of the customer (stickles) .On December 31, 2018, this receivable for §200,000 was correctly included in Mills' balance sheet at $132,000.When the receivable was collected on February 15, 2019, the U.S.dollar equivalent was $144,000.In Mills' 2019 consolidated income statement, how much should have been reported as a foreign exchange gain?

• A) $ 0.
• B) $36,000.
• C) $48,000.
• D) $10,000.
• E) $12,000.

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Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period.

Dividends

Funds disbursed by a company to its stockholders, typically as a share of earnings.

Market Price

The present cost at which a service or asset is available for purchase or sale in the marketplace.

Average Collection Period

The typical duration a business must wait to collect payments from its customers for goods or services sold on a credit basis.