Use the following data to answer bellow Questions
On May 20, when the exchange rate was $1.40/£, a U.S. company purchased merchandise from a U.K. supplier for £10,000 and paid for the merchandise on June 5, when the exchange rate was $1.38/£. On August 15, when the exchange rate was $1.23/€, the U.S. company sold the merchandise to a customer in Belgium at an invoice price of €16,000. On September 6, when the exchange rate was $1.21/€, the U.S. company received payment of €16,000 from the Belgian customer. The U.S. company's accounting year ends December 31.
-What is the U.S. company's net exchange gain or loss for the year?

Question

Use the following data to answer bellow Questions 
On May 20, when the exchange rate was $1.40/£, a U.S. company purchased merchandise from a U.K. supplier for £10,000 and paid for the merchandise on June 5, when the exchange rate was $1.38/£. On August 15, when the exchange rate was $1.23/€, the U.S. company sold the merchandise to a customer in Belgium at an invoice price of €16,000. On September 6, when the exchange rate was $1.21/€, the U.S. company received payment of €16,000 from the Belgian customer. The U.S. company's accounting year ends December 31.
-What is the U.S. company's net exchange gain or loss for the year?

Quizplus · Accepted Answer

£10,000 x ($1.40 - $1.38) = $200 gain
€16,000 x ($1.23 - $1.21) = $320 loss
Net effect = $120 loss

Use the Following Data to Answer Bellow Questions