Assume That Lewis International Sells Running Shoes to a British

question 26

Multiple Choice

Assume that Lewis International sells running shoes to a British importer on June 1 and that the sale is denominated at £75,000 and will be collected on July 15. Assume the treatment of FASB Statement 52 and that no forward contract is entered into. Also assume that Lewis closes its books at the end of each month. The following are the relevant exchange rates.
$\begin{array}{ll}\text { Spot rate on June 1 } & \$ 1.6200 \\ \text { Forward rate for July } & \\ 15 \text { delivery } & \$ 1.6000 \\ \text { Spot rate on June 30 } & \$ 1.6100 \\ \text { Spot rate on July 15 } & \$ 1.5950\end{array}$
-How much cash will Lewis receive on July 15?

• A) $120,750
• B) $120,000
• C) $119,625
• D) $121,500

---

Definitions:

Executive Agencies

Government units at the national level under the direct authority of the president or executive branch, responsible for implementing and administering federal laws and policies.

Independent Agency

An agency that is typically not located within a government department. It is governed by a board of commissioners appointed by the president with the advice and consent of the Senate.

Accounting Commission

An accounting commission refers to a governing body or group of experts that oversees accounting standards and practices, ensuring integrity and compliance within the profession.

Informal Rule Making

A process by which regulatory agencies create and issue rules through a less formal process than formal rulemaking, often involving public notice and comment.