Tuliptime, Inc. sold American fashions to a Japanese company at a price of 4 million yen. On the sale date, the exchange rate was $.0100 per Japanese yen, but when Tuliptime received payment from its customer, the exchange rate was $.0103 per yen. When the foreign receivable was collected, Tuliptime:

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Tuliptime sold American fashions for 4 million yen, which was equivalent to $40,000 on the sale date. However, when Tuliptime received payment, it received 4,120,000 yen, which was equivalent to $42,436 ($1 = 103 yen). Therefore, Tuliptime earned a gain of $2,436 ($42,436 - $40,000) due to the fluctuation of the foreign currency. This gain should be credited to the account Gain on Fluctuation of Foreign Currency.