On December 1, 2017, Sedona Trading Co. sold goods to a German company for 25,000 German marks (25,000 DM) to be collected on January 12, 2018. The exchange rates on December 1 and December 31, 2017 are US$0.75 = 1 DM and US$.90 = 1 DM, respectively. What is Sedona's sales revenue in U.S. dollars?

Question

Quizplus · Accepted Answer

The sales revenue in U.S. dollars is calculated based on the exchange rate on the date of the sale, which is December 1, 2017. Therefore, 25,000 DM * US$0.75/DM = $18,750.