Mills Inc Had a Receivable from a Foreign Customer That Is

question 36

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, 2010, this receivable for §200,000 was correctly included in Mills' balance sheet at $132,000. When the receivable was collected on February 15, 2011, the U.S. dollar equivalent was $144,000. In Mills' 2011 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:

Perpetual

Continuing indefinitely without interruption; in accounting, it often refers to systems that continuously update inventory or records.

Inventory System

A method or system used to plan, organize, and control the goods or materials that are held in stock, ensuring efficient management and use of inventory.

Costly

Involving high expenses; describing something that requires significant financial outlay.

Periodic Inventory Systems

Periodic Inventory Systems is an inventory management method where inventory levels are updated and physical counts are conducted at specific intervals, typically at the end of an accounting period.