Flynn Corporation purchased bicycles from a British manufacturer at a price of 45,000 British pounds on November 15, 2009, with payment due in 60 days. Using the following exchange rates, what gain or loss from currency fluctuations should be recognized in 2009 and 2010? $\begin{array}{ll}
\text { Nov. 15, } 2009 & \$ 1.70 \text { per British pound } \
\text { Dec. 31, } 2009 & \$ 1.75 \text { per British pound }\
\text { Jan. 15, } 2010 & \$ 1.73 \text { per British pound }\
\end{array}$

Question

Quizplus · Accepted Answer

The correct answer is A because the British pound appreciated against the US dollar from November 15, 2009, to December 31, 2009, resulting in a loss for Flynn Corporation. From December 31, 2009, to January 15, 2010, the British pound depreciated against the US dollar, resulting in a gain for Flynn Corporation.

Flynn Corporation Purchased Bicycles from a British Manufacturer at a Price