On June 18,Wyman Company (a U.S.Company)sold merchandise to the Nielsen Company of Denmark for €60,000 (Euros),with a payment due in 60 days.If the exchange rate was $1.35 per euro on the date of sale and $1.14 per euro on the date of payment,Johnson Company should recognize a foreign exchange gain or loss in the amount of:

Question

Quizplus · Accepted Answer

To calculate the foreign exchange gain or loss, we need to first convert the Euro amount into US dollars at the two different exchange rates:

- On June 18: €60,000 x $1.35/Euro = $81,000
- On August 17 (60 days later): €60,000 x $1.14/Euro = $68,400

The US dollar amount has decreased by $81,000 - $68,400 = $12,600. Since the US dollar has strengthened against the Euro, this represents a foreign exchange loss for Wyman Company.

Therefore, the correct answer is E) $12,600 loss.

On June 18,Wyman Company (A U