Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2011, with payment of 10 million Korean won to be received on January 15, 2012. The following exchange rates applied:

Assuming a forward contract was not entered into, what would be the net impact on Car Corp.'s 2011 income statement related to this transaction?

A) $500 (gain).
B) $500 (loss).
C) $200 (gain).
D) $200 (loss).
E) $- 0 -

Question

Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2011, with payment of 10 million Korean won to be received on January 15, 2012. The following exchange rates applied:

Assuming a forward contract was not entered into, what would be the net impact on Car Corp.'s 2011 income statement related to this transaction?

A) $500 (gain). 
B) $500 (loss). 
C) $200 (gain). 
D) $200 (loss). 
E) $- 0 -

Quizplus · Accepted Answer

The Answer of Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2011, with payment of 10 million Korean won to be received on January 15, 2012. The following exchange rates applied:

Assuming a forward contract was not entered into, what would be the net impact on Car Corp.'s 2011 income statement related to this transaction?

A) $500 (gain). 
B) $500 (loss). 
C) $200 (gain). 
D) $200 (loss). 
E) $- 0 -

Car Corp (A U