Tuliptime,Inc.sold American fashions to a Japanese company at a price of 4 million yen.On the sale date,the exchange rate was $0.0100 per Japanese yen,but when Tuliptime received payment from its customer,the exchange rate was $0.0103 per yen.When the foreign receivable was collected,Tuliptime:

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C) When Tuliptime collected the receivable, the exchange rate had changed from $0.0100 to $0.0103 per yen, increasing the value of the 4 million yen received. The original sale would have been recorded at 4 million yen * $0.0100 = $40,000. At the new exchange rate, the collection is worth 4 million yen * $0.0103 = $41,200. The difference of $1,200 represents a gain on the fluctuation of foreign currency, which is why Tuliptime would credit a gain account.