Suppose a Canadian company purchased merchandise from a British firm for 200,000 British pounds.Assume the exchange rates for the British pound were as follows: $\begin{array}{ll}
\text { Date of purchase } & \$ 2.36 \
\text { Date of cash payment } & \$ 2.33
\end{array}$ The exchange gain/loss for the Canadian company on this transaction was:

Question

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The Canadian company purchased merchandise for 200,000 British pounds. At the date of purchase, the exchange rate was $2.36, so the cost of the merchandise in Canadian dollars was 200,000 * 2.36 = $472,000. At the date of cash payment, the exchange rate was $2.33, so the amount of Canadian dollars required to pay for the merchandise was 200,000 * 2.33 = $466,000. Therefore, the Canadian company realized an exchange gain of $472,000 - $466,000 = $6,000.

Suppose a Canadian Company Purchased Merchandise from a British Firm Date of purchase $2.36 Date of cash payment $2.33\begin{array}{ll}\text { Date of purchase } & \$ 2.36 \\\text { Date of cash payment } & \$ 2.33\end{array} Date of purchase Date of cash payment ​$2.36$2.33​

Suppose a Canadian Company Purchased Merchandise from a British Firm $\begin{array}{ll}\text { Date of purchase } & \$ 2.36 \\\text { Date of cash payment } & \$ 2.33\end{array}$