A USManufacturer Has Sold Computer Services to a Foreign Firm, Billed

question 54

Multiple Choice

A U.S.manufacturer has sold computer services to a foreign firm, billed the firm and later received 200,000 foreign currency units (FC) .The exchange rates were 1 FC = $.75 on the date of the sale and 1 FC = $.80 when the receivable was settled.On the transaction date, the settlement exchange rate is estimated to be 1 FC = $.72.By the settlement date, what is the total exchange gain or loss recorded for the transaction if the two-transaction method is used?

• A)​$10,000 exchange gain
• B)​$6,000 exchange loss
• C)​$10,000 exchange loss
• D)​no gain or loss

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