Marshall Company sold supplies in the amount of €25,000 (euros)to a French company when the exchange rate was $1.21 per euro.At the time of payment,the exchange rate decreased to $0.82.Marshall must record a:

Question

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Marshall Company sold supplies for €25,000 which at the time of the transaction was worth $30,250 ($1.21 x €25,000). However, at the time of payment, the exchange rate decreased to $0.82 per euro. Therefore, the amount that the French company had to pay was $20,500 ($0.82 x €25,000), which is $9,750 less than what Marshall Company originally expected to receive. This represents a loss for Marshall Company. Therefore, the correct answer is option C.

Marshall Company Sold Supplies in the Amount of €25,000 (Euros)to