REFERENCE: Ref.09_03
Car Corp.(a U.S.-based company)sold parts to a Korean customer on December 16,2008,with payment of 10 million Korean won to be received on January 15,2009.The following exchange rates applied:
SHAPE \* MERGEFORMAT

-Mills Inc.had a receivable from a foreign customer that is due in the local currency of the customer (stickles).On December 31,2008,this receivable for §200,000 was correctly included in Mills' balance sheet at $132,000.When the receivable was collected on February 15,2009,the U.S.dollar equivalent was $144,000.In Mills' 2009 consolidated income statement,how much should have been reported as a foreign exchange gain?

Question

REFERENCE: Ref.09_03
Car Corp.(a U.S.-based company)sold parts to a Korean customer on December 16,2008,with payment of 10 million Korean won to be received on January 15,2009.The following exchange rates applied:
SHAPE \* MERGEFORMAT
 
-Mills Inc.had a receivable from a foreign customer that is due in the local currency of the customer (stickles).On December 31,2008,this receivable for §200,000 was correctly included in Mills' balance sheet at $132,000.When the receivable was collected on February 15,2009,the U.S.dollar equivalent was $144,000.In Mills' 2009 consolidated income statement,how much should have been reported as a foreign exchange gain?

Quizplus · Accepted Answer

The foreign exchange gain is calculated as the difference between the amount received when the receivable was collected ($144,000) and the amount at which it was recorded on the balance sheet ($132,000), resulting in a gain of $12,000.

REFERENCE: Ref.09_03 Car Corp.(a U.S.-Based Company)sold Parts to a Korean Customer on Customer