Flynn Corporation purchased bicycles from a British manufacturer at a price of 45,000 British pounds on November 15, 2011with payment due in 60 days. Using the following exchange rates, what gain or loss from currency fluctuations should be recognized in 2011 and 2012, respectively? Nov. 15, 2011 $1.70 per British pound
Dec) 31, 2011 $1.75 per British pound
Jan) 15, 2012 $1.73 per British pound

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In 2011, the exchange rate increased from $1.70 to $1.75, resulting in a loss of $2,250 (45,000 * (1.75 - 1.70)). In 2012, the rate decreased to $1.73, resulting in a gain of $900 (45,000 * (1.75 - 1.73)).

Flynn Corporation Purchased Bicycles from a British Manufacturer at a Price