Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied: Assuming a forward contract was entered into on December 16, what would be the net impact on Jackson's 2022 income statement related to this transaction?
A) $400 (gain).
B) $400 (loss).
C) $600 (gain).
D) $600 (loss).
E) $0.

Question

Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:  Assuming a forward contract was entered into on December 16, what would be the net impact on Jackson's 2022 income statement related to this transaction?
A) $400 (gain). 
B) $400 (loss). 
C) $600 (gain). 
D) $600 (loss). 
E) $0.

Quizplus · Accepted Answer

The Answer of Jackson Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2021, with payment of 20 million Korean won to be received on January 15, 2022. The following exchange rates applied:  Assuming a forward contract was entered into on December 16, what would be the net impact on Jackson's 2022 income statement related to this transaction?
A) $400 (gain). 
B) $400 (loss). 
C) $600 (gain). 
D) $600 (loss). 
E) $0.