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Calculation of Foreign Exchange Translations

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On November 15, 2003, Chow Inc., a U.S. company, ordered merchandise FOB shipping point from a German company for 200,000 euros. The merchandise was shipped and invoiced on December 10, 2003. Chow paid the invoice on January 10, 2004. The spot rates for euros on the respective dates were:

November 15, 2003 $.4955
December 10, 2003 .4875
December 31, 2003 .4675
January 10, 2004 .4475

In Chow's December 31, 2003, income statement, the foreign exchange gain should be?

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Foreign Currency Transaction

On November 15, 2003, Chow Inc., a U.S. company, ordered merchandise
FOB shipping point from a German company for 200,000 euros. The merchandise was
shipped and invoiced on December 10, 2003. Chow paid the invoice on January 10, 2004.
The spot rates for euros on the ...

Purchase this Solution


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