Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Question

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Breanna Boutique purchased £50,000 when the exchange rate was $1.97 per British pound, which equals $98,500 ($1.97 x £50,000). At year-end, the exchange rate increased to $2.76 per British pound, which means that the value of the purchases decreased to $138,000 ($50,000 x $2.76). Therefore, Breanna Boutique experienced a loss of $39,500 ($138,000 - $98,500).

Breanna Boutique Purchased on Credit £50,000 Worth of Clothing from a British