Brown Company sold supplies in the amount of 15,000 euros to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Brown must record a loss of $450.

Question

Quizplus · Accepted Answer

To calculate the loss, we need to determine the difference between the exchange rate at the time of the sale (1.15) and the exchange rate at the time of payment (1.12):

1.15 - 1.12 = 0.03

This means that for every euro sold, Brown Company received $0.03 less than they anticipated.

The total amount of euros sold was 15,000 euros, so we can calculate the loss as:

15,000 euros x $0.03 = $450

Therefore, Brown Company must record a loss of $450.

Brown Company Sold Supplies in the Amount of 15,000 Euros