Flynn Corporation purchased bicycles from a British manufacturer at a price of 45,000 British pounds on November 15,2017 with payment due in 60 days.Using the following exchange rates,what gain or loss from currency fluctuations should be recognized in 2017 and 2018,respectively? Nov.15,2017 $1.70 per British pound
Dec.31,2017 $1.75 per British pound
Jan.15,2018 $1.73 per British pound

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Flynn Corporation would recognize a loss in 2017 because the exchange rate increased from $1.70 to $1.75, resulting in a higher payable amount in USD. The loss is calculated as (45,000 * ($1.75 - $1.70)) = $2,250. In 2018, the exchange rate decreased to $1.73, resulting in a gain of (45,000 * ($1.75 - $1.73)) = $900.

Flynn Corporation Purchased Bicycles from a British Manufacturer at a Price